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'Return being processed' means the IRS got your tax return — but your refund could still be delayed, says CPA

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Key Points
  • Typically, the IRS issues refunds in three weeks or 21 calendar days.
  • "You may want to call the IRS to find out what's going on," says Howard Samuels, a certified public accountant at Samuels & Associates in Florham Park, New Jersey, if you use the Where's My Refund? tool and see, "Your return is being processed."
  • If you don't receive a tax refund by June 2, 2022, the IRS is required to pay you interest on your refund.

If you've submitted your federal tax return and are checking the IRS Where's My Refund? tool to find out the status of your refund, you may be wondering what "your return is being processed" means.

It means the IRS "got your tax return, so you don't have to sweat that there was an issue with them receiving it," says Howard Samuels, a certified public accountant at Samuels & Associates in Florham Park, New Jersey.

Typically, the IRS processes most returns and issues refunds within three weeks or 21 calendar days of receipt. "Unfortunately, due to Covid-19, the IRS is overwhelmed," Samuels says.

Refunds will probably be delayed this year because of understaffing issues and tax law changes as a result of Covid-19, Samuels says. The IRS is experiencing logjams as a result of disbursing stimulus payments and Child Tax Credit advances, Henry Grzes, a lead manager for tax practice and ethics at the American Institute of Certified Public Accountants, recently told Grow.

Still, the IRS says it expects to have "most" refunds out within that 21 days timeline, according to a statement released by the tax agency on January 24.

To speed things along, "filing electronically with direct deposit and avoiding a paper tax return is more important than ever this year," IRS commissioner Chuck Rettig said in a statement on January 10.

Here's what you can do if you suspect your federal tax refund is delayed or you need more information about your return.

How to contact the IRS: 'Your best bet is to call first thing in the morning'

Given the backlog, prepare to wait a few more weeks than normal, Samuels says. "At this point I would say sit tight for at least four to six weeks. After that, you may want to call the IRS to find out what's going on," he says.

Last year, taxpayers who called to ask about their financial situations had just a 1 in 9 chance of being answered — and those who did get through lingered on hold for an average 23 minutes, according to an annual report from the Taxpayer Advocate Service.

"Your best best is to call first thing in the morning as soon as the IRS opens at 7 a.m. ET," Samuels says. "I've also heard some people have luck when they call later in the day around 6 p.m. or 6:30 p.m. [Eastern] right before the IRS closes at 7 p.m."

VIDEO3:1303:13
Where your federal taxes are spent

Video by David Fang

The IRS owes you interest on late refunds

If it takes a while for you to get your money from the government, there is a silver lining, Samuels says: "The law requires the IRS to pay interest on any delayed refund checks."

This year's tax filing deadline is April 18. If you don't receive a refund within 45 days after the deadline, which would bring you to June 2, 2022, the IRS will owe you interest.

In 2020, the IRS owed many taxpayers interest on late refunds. The average interest payment was $18.

"If you're waiting on a bigger refund, that could be real interest, and it compounds daily," Samuels says.

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