IRS Delays 2026: Which Tax Returns, Refunds Could Be Held Up

Tax refund delays are on the horizon for many Americans this tax season, according to a recent report from the Treasury Inspector General for Tax Administration. The report warns that IRS staffing shortages and backlogs could lead to processing delays for some tax returns, potentially putting a damper on plans to use refunds for upcoming expenses like home renovations or family vacations.

With an expected 164 million tax returns for the 2025 tax year, the IRS is facing a daunting task. The agency still needs to process nearly 2 million unresolved tax cases from previous years, all while operating with a workforce that has shrunk by approximately 27%. These challenges, combined with an executive order to phase out paper checks, could result in delays for many taxpayers.

Returns that require manual handling, such as paper filings, amended returns, and returns flagged for identity verification or mismatched income, are most likely to experience delays. On the other hand, straightforward e-filed returns with direct deposit refunds or payments are still expected to be processed on time, especially for early filers who submit before the peak filing season in March and April.

However, there are exceptions to the rule. Taxpayers claiming the earned income tax credit or additional child tax credit can’t expect refunds before mid-February. Additionally, those anticipating a refund via paper check may face delays, as the IRS is now freezing refunds for six weeks unless taxpayers provide their bank account information for direct deposit.

To avoid tax refund delays, taxpayers are advised to double-check their returns before filing, ensuring that all income documents like W-2s and 1099s match what was reported, and that bank routing and account numbers are accurate. Setting up an IRS Online Account for easy access to tax records and notices is also recommended, along with using tools like “Where’s My Refund?” to track refund status.

In conclusion, filing electronically with direct deposit remains the most reliable way to avoid delays this tax season, as per the IRS. By staying informed and taking necessary precautions, taxpayers can navigate potential delays and ensure a smoother tax refund process.