From December 22,
2018, until January 25, 2019, the U.S. federal government was partially shut
down. Now that it’s ended, the leading question for many New Jersey residents
seems to be “When will I get my tax refund?”

The Internal
Revenue Service (IRS) was among the government agencies impacted by the
closure. It retained approximately 12.5% of its staff during the shutdown,
which was the longest in U.S. history, but these employees were primarily
focused on technology and security concerns, not refunds for taxpayers.

Although the IRS stated that it would be processing tax returns and accepting payments, it would not be performing the following services during the shutdown:

  • Processing refunds
  • Answering phone helplines
  • Updating tax forms

Although taxpayers could file for a tax extension, April 15 continues to be the deadline for money owed.

When the shutdown
ended, the IRS resumed operations on January 28 and officially opened the 2019
individual tax filing season the same day by accepting e-filed returns. In a statement posted on its website, the agency
stated that it would do everything in its power to ensure that this year’s tax
season ran smoothly. The IRS added that it would issue refunds as soon as
possible and expected to start paying early ones in mid- to late February.

Although this
sounds like good news for those expecting a refund, some New Jersey residents
may still encounter delays. The primary reasons are explained below.

Delays in Tax Software Integration

the IRS had a lot
of catching up to do with all the paperwork and communications that accumulated
during the government closure. One of the major backlog areas is integrations
for e-filed returns.

Before the
shutdown, software developers at the IRS and the state agencies that process
state tax returns were hard at work applying the huge amount of changes to the tax
code. These updates had to be sent out through the programs that taxpayers use
to file their returns. Due to the closure, many states were unable to finish
updating their software to accept returns.

Delays in Tax Software Integration

While most of the
major changes and updates have been completed, some people can still encounter
a software-related delay, such as small business owners who want to leverage
the new tax deductions.

Delays Due to the PATH Act

The IRS stated on
its website that at least two filing statuses could mean a delayed refund this
year, namely those who claim the Earned Income Tax Credit or the Additional
Child Tax Credit. The agency said that these filers could, and may already
have, experienced a hold on their refund.

This is because
the Protecting Americans from Tax Hikes (PATH) Act requires the IRS to wait
until after February 15 before it can process refunds for those tax credits.
The goal is to eliminate fraud and give the IRS enough time to verify that no
duplicate returns were filed. The problem is that your entire refund gets held
up, not just the Earned Income Tax Credit or the Additional Child Tax Credit
parts.

Delays Due to the PATH Act

The IRS stated last
year that people affected by this delay shouldn’t expect to receive refunds
until the week of February 25, assuming that there are no other issues with
their tax returns.

This is not a new
rule, but for those who are claiming either of those credits for the first
time, the IRS wanted to make them aware that they may have to wait a little
longer for their refund, especially if the backlog continues to be challenging.

File Early

Even if you
receive your tax refund later than usual, it still makes sense to file as soon
as you have all the documentation needed to complete your tax return. If you’re
a business owner wanting to take advantage of the 199(a) deduction, you won’t
be filing your return until late March at the earliest, so some delays won’t
make much of a difference to you.

Contact a New Jersey Tax Attorney

Contact a New Jersey Tax Attorney

Tax season can be
stressful enough without worrying about when you’ll get your refund. One of the
best ways to minimize delay is to ensure that your tax return is complete and
accurate at the time it is filed.

Attorney Brad
Paladini
provides experienced and knowledgeable tax
guidance
to New Jersey individuals and businesses who require
assistance with understanding and fulfilling their tax obligations. For more
information, please contact Paladini Law or call 201-381-4472.

The post How Will A Government Shutdown Affect My NJ Tax Refund? appeared first on Paladini Law.