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It appears that for the third year in a row, NY state is planning on delaying refunds to New York taxpayers. The last two years, the state was savvy in delaying refunds by issuing a blanket letter requesting “additional documentation” in order to release refunds. However, in many cases, the state already had all the documentation in order to process refunds. In light of the current budget crisis, it appears New York State can no longer beat around the bush.
Two other states–Hawaii & North Carolina–have already informed their taxpayers that refunds could be held as long as July! New York state may soon follow suit if they can not resolve the projected $8.2 Billion budget gap by April 1st. And with the State Senate at a stand still, and continuous infighting between NY legislators and Governor Patterson, it appears almost certain that New York will also be forced to delay over $500,000,000 in state refunds.
NY State has until June to issue all refunds before they must pay out interest. However, this is little comfort for struggling & out-of-work NY taxpayers that need these refunds just to make ends meet.
“The refund checks amount to money that belongs to taxpayers. They haven’t given the state permission to manage it for them,” said an editorial in North Carolina’s News and Record newspaper. “[The state] should have anticipated and planned for shortfalls. Time is money, and the money should be returned to its rightful owners on time.”
Both New York and North Carolina point out that delays will not apply to those returns that have already been filed. New York has paid out $293 million in refunds so far to 281,000 taxpayers; North Carolina has issued more than $400 million.
However, since the majority of taxpayers have not yet filed, these refund delays will affect the majority of NY Taxpayers. This is not right. NY Taxpayers pay on time, their refunds should be distributed on time. We here at R&G Brenner recommend that if you are able to file your tax return and have not yet done so, to file as soon as possible to avoid having your refunds delayed.