IRS Tax Refund Delays: What to Expect in 2025 and How to Prepare

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With the onset of the tax season, many taxpayers are eagerly waiting for their tax refunds. However, refund processing delays have become a more common issue than ever. This has left people wondering why their refunds are late. Our tax accountants at Jarrar & Associates are familiar with the pangs of delays in refunds. That is why we are here today with this blog on IRS tax refund delays: what to expect in 2025 and how to prepare.

Here, you will read about the reasons behind refund delays and what you can do to avoid waiting unnecessarily.

The Causes of Tax Refund Delays in 2025

Multiple factors can result in delays in tax refunds this year. The timelines of IRS refunds might differ depending on the filing method, claimed credits, and whether additional verification is required. Here are a few common reasons.

  1. Errors or Missing Info

A common reason for refund delays is errors in the tax return. Even seemingly insignificant mistakes can force the IRS to put your return on hold for manual review. Check out a few examples of common errors that trigger delays.

  • Mismatched SSN:If the SSN (Social Security Number) on your return does not match IRS or Social Security Administration records, processing will be delayed until the problem is resolved.
  • Incorrect Filing Status:If your filing status does not match the IRS records or is inconsistent with the information provided on your return, your refund may be held for review.
  • Bank Account Errors:The IRS will try to issue a paper check, causing a significant delay if you provide incorrect direct deposit information.
  • Inaccurate Income Reporting:The IRS may take extra time to verify your return if the income you reported does not match IRS records.

 

  1. Claiming Specific Tax Credits

Refunding will be delayed by law if you claim an Earned Income Tax Credit (EITC) or Additional Child Tax Credit (ACTC). The IRS holds refunds that include these credits until at least the middle of February to prevent fraud. Furthermore, other tax credits, such as the Premium Tax Credit or American Opportunity Tax Credit (AOTC), may require additional documentation, slowing down refund processing.

  1. IRS Review and Refund Freeze

Understanding IRS Refund Freeze

An IRS refund freeze occurs when the agency temporarily stops processing a refund to investigate potential fraud, errors, or theft concerns.

Understanding IRS Code 810

Did you find Code 810 when you were checking your IRS tax transcript? If you did, know that the IRS has frozen your refund for further review. This can be the result of identity verification issues, suspected fraud or duplicate tax return filings, inconsistencies or errors in reported income, tax return amendments requiring additional review, and adjustments associated with tax credits or deductions.

Resolving a Refund Freeze

  • Look for IRS notices in the mail requesting additional info.
  • Contact the IRS at 800-829-1040 for clarification.
  • If you need to complete the identity verification process, complete it through the ID section of the IRS website as soon as you can.
  • After completing verification, wait 2-4 weeks for the refund to be released.

 

  1. The Method of Filing

Even your filing method can cause IRS tax refund delays: what to expect in 2025 and how to prepare.

  • E-File with Direct Deposit:This is considered the fastest option as it allows the IRS to process refunds within 2-3 weeks.
  • Paper Return with Mailed Check:This method can take up to 12 weeks or longer because of manual processing.
  • Filing from Overseas:The IRS may flag your attempt to file taxes from overseas to conduct additional fraud prevention checks, adding to processing time.

 

  1. Outstanding Debts that Offset Refunds

Your refund may be reduced or entirely withheld if you owe money to the government. Refunds can be offset to cover the following.

  • Defaulted student loans
  • Unpaid federal or state taxes
  • Overpayments of federal benefits
  • Child support arrears

  1. Fraud Prevention Measures

 

The IRS leverages fraud detection tools to identify potential identity theft or fraudulent returns. If your return is flagged, it will be held until the IRS verifies your identity.

 

Those who receive Letter 5071C should follow the instructions to confirm their identity by phone or online. Refunds may be further delayed or even denied if the verification process is not completed in time.

How to Check Tax Refund Status

The best and quickest way to check tax refund status is to use an online tool provided by the IRS. This online tool is designed to track refund status. Just provide your Social Security Number or Individual Taxpayer Identification Number, filing status, and exact refund amount from your tax return.

What If the Refund Takes Too Long

The IRS suggests taxpayers should wait at least 3 weeks after e-filing. If you do not receive your refund after 21 days, you can contact the IRS. There are a few situations when you should not wait.

  • Your refund status has not changed for over 6 weeks.
  • You received a notice requesting additional information from the IRS, and you responded, but the refund is still pending.
  • You never received your refund, even if you were informed that it was issued.

How to Resolve a Delayed Refund

  • Use the tool mentioned earlier to check the latest status.
  • Check for IRS correspondence requesting additional paperwork.
  • Verify direct deposit information to ensure the IRS has the correct bank details.
  • Contact the IRS for support if the delay surpasses 6 weeks.

How to Avoid Future Refund Delays

  • File as early as you can to avoid peak tax season processing delays.
  • E-file and choose direct deposit for faster refund processing.
  • Double-check return details before submitting to prevent errors.
  • Keep copies of tax documents in case the IRS requests verification.
  • Hire a professional tax preparer from our organization to ensure accuracy and compliance.

Final Words

Well, there you have it – an inclusive guide to IRS tax refund delays: what to expect in 2025 and how to prepare. Tax refund delays are extremely frustrating. Trust us, we know! However, the solution lies in understanding the most common causes that we have already highlighted here. Once you know which mistakes to avoid and what proactive steps you can take to resolve them, you will never have to worry about refund delays.

FAQs

Q1. Can the IRS delay my refund if I owe back taxes from a previous year?

A1. Yes, the IRS can offset your refund to cover unpaid federal or state taxes from prior years. You will receive a notice explaining the adjustment if this happens.

Q2. Does filing jointly or separately affect tax refund processing time?

A2. Filing jointly or separately doesn’t directly impact processing time, but separate filers claiming deductions may trigger manual reviews, causing delays compared to joint filers with simpler returns.

Q3. Can amending a tax return delay my refund?

A3. Yes, amended returns require manual review, which can extend processing by 16 weeks or more. If an amendment changes your refund amount, expect additional verification before receiving payment.

Q4. Does filing taxes with a new dependent delay the refunds?

A4. Claiming a new dependent may trigger extra verification, especially for Earned Income Tax Credit (EITC) or Child Tax Credit (CTC). The IRS may request proof of eligibility, delaying refund processing.

Q5. Can bank issues delay my direct deposit refund?

A5. Yes, incorrect bank details can result in refunds being returned to the IRS. In such cases, the IRS will issue a paper check, significantly increasing wait times.

Summary: What are the actual causes of tax refund delays? Read all about the subject on this blog – IRS tax refund delays: what to expect in 2025 and how to prepare.