7 Reasons that the IRS may still owe you money

Tax Day 2022 was moved from April 15 to April 18 in order to make room for a holiday. Many people requested extensions to extend their time, and they did so provided that they submitted their requests to IRS before Tax Day.

Find out more Stimulus Payments Are Coming to These States in October
Student Loan Forgiveness Mark These 4 Dates On Your Calendar Now

Those to whom the IRS granted extensions bought themselves six extra months to get their affairs in order — and they’re quickly running out of time.

The final deadline is Monday, Oct. 17The IRS will not offer any grace periods thereafter. If you haven’t filed yet — and even if you have, in some cases — the IRS might still owe you money.

Here’s why.

You Didn’t File Yet

You might already have filed if the IRS granted your request for a six month extension of the April 18 deadline. The IRS usually processes refunds in 21 days, so you should get your refund as soon as possible.

Take Our Survey: Have You Ever Lost Wealth Due To a Natural Disaster?

But if you’re a straggler who still hasn’t filed despite the extension deadline being less than 10 days away, your procrastination could be keeping money out of your checking account.

When the IRS processes your return, it might very well be that the agency owes you a refund, but you won’t know until you file.

After receiving an Extension, You Are Overpaid

Even when the IRS grants extensions, you’re still required to pay your tax bill by the original deadline, which this year was April 18. Estimating a tax bill is a better-safe-than-sorry situation — when dealing with the IRS, it’s always better to overpay and get money back than underpay and get a bill with penalties and interest.

You may be surprised to find out that you paid more than you expected after you file for an extension. If that’s the case, the IRS will be sending the difference back your way.

The IRS Just Didn’t Get to You Yet

The IRS had already processed 97% of all returns received by mid-July. However, the IRS was still processing 6.2 millions of unprocessed individual tax returns as of Sept. 23. This includes tax returns for 2021 as well as late-filed returns from years past.

If you’re still waiting, it could be that the overburdened, underfunded agency simply hasn’t gotten to your returns yet.

Your returns contain errors or require further review

Of the 6.2 million returns the IRS is still sorting through, 1.6 million contained errors requiring correction or other “special handling.”

Most cases this is due to a return.

If you haven’t heard anything, don’t panic. If the IRS can fix the error, it will. However, if the IRS needs additional information or verifications of information it already has, it will contact you. In those cases, the IRS says, “The resolution of these issues could take more than 120 days depending on how quickly and accurately you respond, and how quickly we can complete the processing of your return.”

The IRS may end up owing money if you correct these errors.

You Filled by Mail

The IRS processes returns that don’t contain errors or require further review in the order that they’re received — but only until March. You may have been relegated to the back if you submit a paper return via snail mail after this deadline.

A large majority of the 6.2 million returns the IRS is still sifting through — 4.6 million — are paper returns waiting to be reviewed and processed.

If yours is among that heap, you might very well be getting a refund that hasn’t been processed yet. Next year, file early if you insist on putting pen to paper — or better yet, join the e-filing revolution that began in 1986 and submit your returns online.

You have filed an amended return

If you filed an amended return using Form 1040-X, you might still have some good news coming your way if you overpaid or are owed credits for the year you’re amending — but it might take a while.

The IRS still had 1.5 million amended returns to process as of September 24, 2010. They’re processed in the order they’re received, but the IRS warns that it could take up to 20 weeks to get to them.

You are eligible for interest payments

The IRS processes refunds first. This is because if it keeps you waiting, it must pay you your refund along with interest.

The IRS has 45 days from the date of receipt to process refunds before interest begins accruing. On Oct. 1, the rate — which compounds daily — jumped to 6% from 5%, which it had been paying for the quarter starting July 1.

In some cases, an interest payment might be due if you get a refund that is not within 45 days of your error-free return.

More from GOBankingRates

This article first appeared on GOBankingRates.com: 7 Reasons the IRS May Still Owe You Money