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Home»Legal»IRS warns many tax refunds could be delayed: here’s why
Legal

IRS warns many tax refunds could be delayed: here’s why

NBTCBy NBTC01/03/2026No Comments3 Mins Read
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Millions of Americans are counting on their tax refund to pay off bills, book a trip, or pad their savings, but this year’s filing season comes with a catch.

IRS says many refunds will take longer than usual, and some taxpayers may not see their money until March or even later.

A combination of legally mandated holds on certain tax credits, sweeping workforce reductions, and a major shift away from paper refund checks is stretching processing times at the moment.

Why refunds may be delayed this season

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The biggest bottleneck affects tens of millions of low and moderate-income filers who claim two of the most popular refundable tax credits.

Under the Protecting Americans from Tax Hikes Act, the IRS is required by law to hold refunds that include the Earned Income Tax Credit or the Additional Child Tax Credit until at least mid-February.

That freeze applies to the entire refund, not just the portion tied to those credits, which means even early filers who submit in late January will not see money before March.

For 2026, the IRS lifted the PATH Act hold on February 16, a couple of days later than usual because February 15 fell on a Sunday and the following Monday was Presidents’ Day.

The agency then began processing these returns, but warned that most refunds claiming EITC or ACTC would not be funded until around March 2 to March 6, assuming electronic filing, direct deposit, and no errors.

That is well beyond the advertised 21-day turnaround that applies to straightforward returns without refundable credits.

Compounding the delay is a sweeping change to how the IRS sends money.

Starting with the 2026 filing season, the agency has effectively phased out paper refund checks, making direct deposit the default.

If a taxpayer files without providing bank account details, or if the information is incorrect and the deposit bounces, the IRS will send a letter asking for the correct routing and account numbers.

Miss that 30-day window or fail to respond, and the agency will eventually mail a paper check, but only after at least six weeks of additional delay.​​

Even small mistakes can freeze a refund.

Transposed digits in a bank account number, a mismatch between the name on the tax return and the name on the bank account, or simple identity verification issues all trigger manual reviews that push processing timelines.

For families relying on that refund to cover rent or an unexpected bill, a weeks-long hold can be more than an inconvenience.

Read More: Are Americans overpaying taxes in 2026? Here’s how to fix it

Staffing, volume, and other IRS challenges

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Behind the scenes, the IRS is heading into the 2026 tax season with far fewer people than it had just a year ago.

The agency now employs about 74,000 workers, down sharply from roughly 102,000 at the start of 2025.

Those cuts, the result of cost-cutting moves under the Trump administration’s Department of Government Efficiency, along with buyouts and attrition, have affected nearly every part of the IRS.

Taxpayer Services, which processes returns and fields calls, has been hit hardest, losing more than 9,000 staff, or about one-fifth of its workforce.

For now, taxpayers can track refunds using the IRS’s “Where’s My Refund?” tool or the IRS2Go app.

To avoid delays, experts say filing electronically, using direct deposit, and double-checking bank and personal details can make a real difference.

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NBTC

NBTC is the editorial account for NBTC News, covering Bitcoin, Ethereum, DeFi, blockchain infrastructure, exchanges, mining, regulation and digital asset markets. The editorial team focuses on clear sourcing, timely updates and practical context for crypto readers.

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