Can waiting to file tax returns as recommended by the IRS affect your 2023 refund?

When Congress enacted various economic relief programs during the pandemic, it took time for the Internal Revenue Service (IRS) to adjust their programs to ensure taxpayers were refunded the correct amount.

Stimulus checks sent by states cause confusion for the IRS

This year, after more than a dozen states have sent inflation relief checks to their residents, the IRS is struggling to determine if these payments count as taxable income. On 3 February, the tax authority reported an increased number of questions “involving special tax refunds or payments made by states in 2022.” The confusion apparently caught the IRS by surprise, and they are “working with state tax officials as quickly as possible to provide additional information and clarity for taxpayers.”

For those who have questions or concerns, the organization says, “the best course of action is to wait for additional clarification on state payments rather than calling the IRS.” If you have already submitted your refund, hold tight, and wait for further guidance. Amending your already submitted return could create more problems down the line.

No clarifications have been made this week, and none will likely come over the weekend. Those seeking guidance will likely have to wait until next week or later this month. Some states could see their federal tax deadline extended depending on how long the IRS takes to resolve these issues.

Which states are impacted?

According to the Associated Press and NPR, residents of states that may consider delaying the filing of their taxes include:

For taxpayers in states outside of those listed above, submitting your tax return as early as possible is your best bet to receiving your refund quickly. However, be sure to complete the process carefully because making simple mistakes can cause significant delays when the IRS begins to process your return.