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“Where’s my refund”! Is a common cry from NY State residents these days, and according to the state for good reason. After using Bank Of America to process refunds for the last 18 years, BOA decided to get out of the tax business all together and did not renew their contract. So what was Albany to do? Outsource the job of course! These subcontractors and not-for-profit groups are backlogged with refund requests which is what is causing the delay for so many New Yorkers.
It has been nearly 3 months since the end of the tax season and all refunds should have been processed by now. Luckily, some NY taxpayers may be entitled to receive interest:
By law, interest is paid on refunds that are issued after May 30 for timely filed returns. Interest is paid only on that part of the refund resulting from over-withholding. To prioritize delivery of the delayed paper refunds, the tax department is assisting the contractor in both speeding up the processing and providing quality assurance. Recovery of the department’s costs associated with this effort—including staff overtime and interest payments—is provided for in the contract, and will not come at additional taxpayer expense, the tax department noted.
“In New York State, you’re required to pay interest 45 days after the filing due date of April 15, so beginning May 31 we’re paying interest on refunds,” said [NY State Department of Finance spokesmen Geoff] Gloak. “The interest goes back to April 15, so interest payments over time are provided for in the contract and won’t come at taxpayer expense.”
The majority of these delays are for taxpayers that filed a paper tax return as opposed to those who filed electronically, but there are still taxpayers out there that did file electronically waiting on their refunds. No surprisingly, residents are mad including Fred Slater; CPA at the NYC firm MS1040 LLC; particularly that private taxpayer data is being handed over to a third party:
“I have all kinds of questions about how much information they were given to process [tax returns]. In other words, you’re giving your private information to a third party. What were they given? The state is doing everything in its power to push people to efile, and they repeatedly contradict themselves on this, and force things. Not all of the returns are efile-able to start with, by their own system restrictions, and then they go through this process of pushing you to efile, but their system is not up to snuff.”