State Tax Refund Delays: Budget Cuts and Legislative Changes Extend Wait Times
With average tax refunds expected to exceed $4,000 this year, taxpayers are eagerly anticipating their payments. However, residents in several states may experience longer-than-normal wait times for refunds due to issues prolonging processing. Federal tax return wait times could also be extended this season because of budget cuts.
To date, the Internal Revenue Service has received 51.5 million federal returns, with tens of millions more anticipated by the April 15 filing deadline. Taxpayers can reduce the risk of slow returns by double-checking all information in their filings, as even minor errors can lead to extended processing timelines.
Idaho: Budget Cuts Impact Refund Timelines
Budget reductions at the Idaho Tax Commission are resulting in taxpayers facing prolonged wait times for refunds. Initially, tax return processing was projected to take 12 to 14 weeks longer, with refunds estimated to arrive up to six weeks later in filers' accounts, according to a February 10 letter from the Idaho Division of Financial Management.
However, the state has addressed some issues causing the initial slowdown. For those submitting returns on or after March 10, e-filers can expect timelines of seven to eight weeks from filing to refund receipt, while paper filers may wait 10 to 11 weeks, as per a tax commission press release. Taxpayers who filed before this date may still encounter extended processing times.
Oregon: Paper Returns Face Specific Delays
The Oregon Department of Revenue has alerted taxpayers that paper return filers will not begin receiving refunds until early April. In contrast, e-filers face no delays and are being processed in the order received, according to the state's revenue department website.
Maxey, a department representative, confirmed via email that paper return processing remains delayed, with processing expected to start at the end of March and the first refunds for paper-filed returns going out in April, aligning with prior estimates. The department has already distributed over 700,000 refunds to e-filers.
South Carolina: Legislative Changes Cause Slowdowns
The passage of the One Big Beautiful Bill Act in 2025 introduced tax law changes that states could choose to adopt or reject. South Carolina's Department of Revenue is working through these changes, deciding what to implement, which has caused slowdowns in return processing, as noted on the department's website.
These delays are slowing tax return processing and leading to longer timelines for receiving refunds. No specific timelines are provided on the revenue department's website, and an email from The Independent seeking clarification has not received a response.
Washington DC: Disputes with Federal Government Add to Delays
Residents in Washington DC are experiencing delays for both e-filed and paper returns, according to the D.C. Office of Tax and Revenue. These delays stem from the District's decision not to adopt certain tax provisions from the One Big Beautiful Bill Act at the state level, including exemptions from tax on overtime, as reported by 4 Washington.
Meanwhile, the state tax season will continue using D.C.'s existing tax laws, as outlined in a letter from D.C. Chief Financial Officer Glen Lee to Mayor Muriel Bowser, reported by local news site The 51st. This means D.C. taxpayers will still pay taxes on tips and overtime, receive a lower child tax credit than the IRS offers, and utilize the qualified business income deduction.
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