Our team has been getting a lot of questions regarding tax refund delays for US citizens abroad. Your issues of long waiting times and uncertainties as to when your tax refund is coming have been heard. And while we can understand the frustration, note that this is due to issues within the IRS system because of the pandemic.
In this blog, we are here to bring some peace of mind. We’ll be sharing with you the current updates of this tax refund matter, plus how you can handle it.
2021 & 2022 US Tax Refund Problems
As of early May, The Washington Post reported that many US readers were discontent about their 2020 tax returns not being fully processed by the IRS.
Furthermore, there were complaints related to delayed refunds. For example, some taxpayers who filed as early as February still haven’t received their refunds. Other taxpayers couldn’t apply their current refund to their tax liability and instead had to pay out of pocket.
The real problem lies behind the scenes at the IRS. The pandemic brought many difficulties to the Internal Revenue Service, just like it did to our personal lives.
For the IRS, they’ve encountered staff shortages, a shift into telecommuting/working from home, and broken printers. Furthermore, there was the onslaught of Americans applying for their stimulus checks and the IRS system not handling the demand.
Tax Delay Basics
Fast forward to the current day, and there are still expected to be problems processing returns. In January 2022 the IRS urged caution when filing your taxes in order to avoid even further delays in tax refund processing.
The IRS released a statement on their refunds page that due to COVID-19, there are processing delays. They said it’s taking them more than 21 days to issue refunds on “some 2020 tax returns that require review including incorrect Recovery Rebate Credit amounts, or that used 2019 income to figure the Earned Income Tax Credit (EITC) and Additional Child Tax Credit (ACTC).”
Furthermore, the IRS stated that all tax-related correspondence and paper-mailed tax returns are taking longer to process. This means that an American living abroad who did file their 2020 tax return – whether through our software or other means – most likely have to wait more than 21 days to receive their refund.
Here at MyExpatTaxes, we’d love to tell you exactly when you’ll receive your tax money back, however, this is out of our hands.
US Tax Refund Solutions
The IRS recommends that you can check the status of your refund on their website:
- 24 hours after they received your e-filed return, or
- Four weeks after you paper-mailed a return
The Check My Refund status by the IRS shares with you personalized info regarding the status of your tax refund after they processed your return and approved your refund.
In order to use the Check my Refund, you need to have the following items with you:
- Social Security Number
- Filing Status
- The exact dollar amount of your refund
Once you log into their system and plug in your info, the IRS will display:
- When your tax return was received
- Exactly when your refund was approved
- How and when your refund was sent
If you do not see this info in their portal, the IRS states that they update their system daily. Therefore, you can check every day to see if your refund info is shown.
You are allowed to call the IRS if it has been more than 21 days since you e-filed, or the information in your Where’s My Refund profile says you should call. However, calling them will not make your refund come faster! Plus, the IRS also has service delays relating to phone call support and reviewing electronically filed returns (even if e-filed!).
We at MyExpatTaxes suggest checking daily the status of your refund on the IRS Where’s My Refund portal.
Your refund information should be available until the third week of December 2022 if you filed your tax return before July 1st. If you filed after, the information will be available throughout the next year until you file a more current-year tax return.
If you need refund information for prior returns (2019 and earlier), you can reach out to our tax team. They can walk you through how to request this info. Otherwise, you can request a transcript online.
US Tax Refunds 101
Tax refunds are essentially a reimbursement to a taxpayer for any excess amount paid to a state or federal government.
Some American expats see refunds as a bonus. The truth is, it’s actually that you overpaid your taxes last year, and you will get the amount (that went above what was needed) back.
If you keep up to date on your tax return and only pay necessary taxes, you most likely won’t receive a refund.
Refundable Tax Credits
Tax credits like the Child Tax Credit for American families abroad are now fully refundable. However, the full benefit of this increase is only available for expats who lived at least six months in the US. These credits were raised to $3,600 for children five and under and $3,000 for children six and over through the American Rescue Plan. Dive into the new Child Tax Credit.
Expat Tax Refund Support
Do you need more expat tax refund support? Our human expert tax team is available to answer your answers and lead you every step of the way. Feel free to log into our award-winning expat tax software and reach out to one of our professionals to get started today!