Delayed Tax Refunds Continue
Due to the state's persistent cash and budget problems, the State Controller had to delay refunds for personal income tax and business entity taxpayers. The State Controller announced on Thursday, February 19, 2009, that once the budget plan provides the needed cash in the treasury, his office will work around the clock to get delayed payments out the door. We have compiled several frequently asked questions about this delay to assist you and your clients:
When will the refund delay be lifted?
It is anticipated that as soon as the cash problems are solved, the refund delay will be lifted. Check this website for updated information on the status of the delay.
Should I wait to file my client’s return?
No. If you have all of the documents and information needed to prepare your client’s return, you may file it any time through April 15 (October 15, if filed on extension). The refund delay does not affect the return due date or our ability to process returns.
Now that the budget is passed, when will my client’s refund be issued?
Even though the budget is enacted, the state must now determine if there is sufficient cash to pay outstanding debts, including tax refunds. Until then, refunds will continue to be delayed.
Are all refunds delayed or just 2008 tax year refunds?
All refunds are delayed, regardless of the tax year they apply to. For example, an approved refund claim for tax year 2006 will be delayed until the state’s cash problems are solved.
Is it possible that my clients will be issued IOUs?
If the state’s cash flow problems do not improve, the Controller may need to issue IOUs. If the Controller has to issue IOUs, you will receive a paper IOU warrant, even if you requested a direct deposit of your client’s refund.For information on the status of a specific client’s refund go to our website and check Refund Status.