Tax season is over and if you were anticipating a refund this year, you’re not alone. According to data released by the Internal Revenue Service, approximately 85 million refunds have been issued for the 2016 tax year, with the average taxpayer netting a refund of $2,940.
However, you may be one of those people asking themselves "Where's my Refund?" if you haven’t received it yet are wondering what happened to it. While you can check the status of your federal tax refund using the Where’s My Refund tool, the system doesn't offer detailed explanations of why your money may be delayed.
7 Reasons for a Late Tax Refund
There are a number of things that can hold up the processing of your tax refund. Here are some of the most common reasons for a delay.
1. Your return includes inaccurate or incorrect information
If your tax return contained numerical errors or other mistakes, that can slow down the pace of your refund. When an error is detected, your return is earmarked for human review, meaning an IRS employee must comb through it to find the mistake. That can add days or weeks to the processing time.
2. Your return was incomplete
Having an incomplete return can also trigger an IRS review, which could mean a longer wait for your refund. If you filed a paper return, for example, and forgot to enter in a key piece of information like your Social Security number – or you didn’t sign your tax forms – the IRS wouldn’t be able to process your return until those items are checked off.
3. You’re a victim of tax fraud
Tax fraud occurs when someone uses your personal information to file a fraudulent tax return and claim a refund in your name. In 2016, the IRS identified 240,260 tax returns with $1.5 billion claimed in fraudulent refunds. If you think you’re a victim of tax-related identity theft, you’re encouraged to contact the IRS and the Federal Trade Commission to report fraud. (See: E-filing with the IRS: Is It Safe?)
4. Your refund was sent to the wrong bank
Filing your return electronically is the fastest way to get your refund if you’re using direct deposit. That assumes, however, that you plugged in the right numbers for your bank account. If you transposed a digit in the routing or account number and your money was sent to someone else’s account, you’ll have to work with the bank that received the refund to recover the money. Keep in mind that the IRS can’t compel banks to turn over the money to you.
5. You claimed certain tax credits
Tax credits reduce your tax liability on a dollar-for-dollar basis. Certain tax credits, including the Earned Income Credit and the Additional Child Tax Credit, often draw scrutiny from the IRS, due to taxpayers claiming these credits fraudulently. If you claimed either credit, that could be the reason why your refund hasn't arrived yet.
6. You amended your return
Amending your tax return can also create a delay. Amended returns must be mailed, rather than filed electronically. When you amend a return, it can take up to three weeks for it to show up in the IRS system, and another 16 weeks to be processed, meaning you may be waiting several months for your refund.
7. Your refund has been offset to pay a debt
If you owe certain debts, including unpaid child support, unpaid state taxes or federal student loans, the IRS can offset your refund by the balance owed. If your refund is offset, you’ll receive a notice from the Bureau of Fiscal Services advising you why your refund was taken and which agency the debt was owed to. You have the right to dispute the debt with the agency that received your refund. (See: 6 Ways the IRS Can Seize Your Tax Refund.)
The Bottom Line
These are the most common reasons for a delayed refund. A refund could also be late if it’s lost in the mail. Having your refund stolen from your mailbox is another possibility. If the Where’s My Refund tool isn’t offering any answers, you can turn to your local IRS office for help. The IRS may be able to trace your refund to find out what’s happened to it and issue a replacement check if needed.