2021 tax refund: why have I not received my payment?

The IRS is still in the process of working through a backlog of tax returns, meaning that there will be delays for unemployment benefits recipients waiting for a refund.

2021 tax refund: why have I not received my payment?

Since the very start of the pandemic the IRS has been tasked with administrating many of the federal programmes aimed at providing financial relief to Americans.

The disruption of the past 15 months has made things difficult for the tax authority and has been forced to run at a limited capacity, while overseeing the stimulus check distribution and a busy tax season.

As such many are experiencing delays, with those expecting a tax refund being forced to wait months for the payment to come through. The IRS usually aims to issue a refund within 21 days of receiving a tax return but they suggest a number of potential reasons for a delay:

  • Filing includes errors, such as incorrect Recovery Rebate Credit
  • Incomplete return
  • Needs further review in general
  • Concerns about identity theft or fraud
  • Includes a claim filed for an Earned Income Tax Credit or an Additional Child Tax Credit
  • Includes a Form 8379, Injured Spouse Allocation, which can take up to 14 weeks to process

Bonus tax refund for unemployment benefits recipients

The IRS have a big job on their hands and they are not helped by a recent change to unemployment benefits that will see millions more people eligible for a tax refund. The American Rescue Plan changed the rules to give each individual filer a $10,200 tax-free unemployment benefits entitlement.

However by the time the package was signed into law in March, many had already completed their returns for 2020 and paid tax on any unemployment payments they had received. The IRS now estimate that around 13 million people will now be eligible for a tax refund as a result of this change.

The IRS confirmed that 2.8 million tax refunds had gone out last week but there are still many more to come. The enormous number of potential recipients could see further delays for anyone still waiting.

How to check on the status of a tax refund

The process may be a bit slower than usual this year but the IRS do offer a handy Where's My Refund? online portal that lets you track the status of the payment. From 24 hours after you file your tax return, assuming that you utilised e-filing, the information should be available to view.

To do so you will need to enter some personal details: Social Security number or Individual Taxpayer Identification Number, filing status (single, married or head of household) and your refund amount in whole dollars.

Many who are expecting a refund on the basis of overpaying tax on unemployment benefits will not have had to calculate their tax refund size, but it can be done using another online tool. This online tax refund calculator provides a simplified version of the IRS’ 1040 tax form. By filling in the relevant information you can estimate your refund amount to access the payment tracker.