Delay of State Refunds Due to State Tax Identity Theft Prevention

Since identity theft related tax refund fraud has become the biggest problem States face, individuals can expect their State refund to take longer to be direct deposited into their bank accounts than in the past. This is due to the additional fraud measures that all States have instituted this filing season to fight this type of refund fraud.

Some States have indicated that they will be delaying the release of refunds for longer periods of time as follows:

Illinois and South Carolina not issuing refunds until after March 1, 2016

Illinois and South Carolina will not be sending out refunds on any returns filed in January or February until mid-March. For those returns filed after March 1, 2016, the refunds will be sent out within two to three weeks from the date the Illinois or South Carolina individual return is accepted.

For more information see the Illinois and South Carolina websites:

• Illinois Refund Delay Alert
• South Carolina January 19 News Release – Enhanced Efforts to Protect Taxpayers from Refund Fraud

The following States have increased the length of time a refund will be received on electronically filed returns:

• Idaho – Taxpayers can expect their refund about 7 weeks after their return has been accepted. See the Refund Information page on the Idaho State Tax Commission website for more information.
• Georgia – Taxpayers can expect their refund 30 – 45 days after the return has been accepted. See the New Fraud Prevention Measures announcement on the Georgia Department of Revenue website for more information.
• Louisiana – Taxpayers can expect their refund up to 60 days after the return has been accepted. See the January 19 Press Release on the Louisiana Department of Revenue website for more information.
• Alabama – Taxpayers can expect their refund in 8 to 12 weeks from the date their return is accepted. See the Taxpayer Identity Theft Prevention page in the Things to Expect from ADOR in the 2016 Filing Season section on the Alabama Department of Revenue website for more information.
• Hawaii – Taxpayers can expect their refund in 4-6 weeks. Some refunds may be delayed for up to 16 weeks. See the Update on Tax Refunds (January 8, 2016) on the Hawaii Department of Taxation website for more information.

States delaying refunds due to not having W-2s from employers:

• Utah will delay any refunds until March 1, 2016 for individuals whose employer had not filed their W-2s with Utah by January 31, 2016. See the Withholding Tax Changes information on the Utah State Tax Commission website.
• Alabama will delay issuing refunds this year on returns for which the state has not received the W-2(s) from a taxpayer’s employer(s). This means that early Alabama filers will not receive their refunds as quickly as they have in prior years.
• Vermont may not complete the processing of some returns until they receive the W-2 from the individual’s employer, which is not due until February 29, 2016. For more information see the 2016 Filing Season Update page on the Vermont Department of Taxes website.

One last reason for a state refund to be delayed is when the State selects an individual’s tax return for identity verification. When this occurs, a letter is sent asking that the individual verify their identity by going to the State website and answering questions. Once the individual has passed the verification quiz (i.e. they have verified that this is their return), the State will finish processing the return and send out the refund. So it is important that if an individual receives a request to verify who they are that they do it as soon as possible.