To fully understand the differences between the IRS being processed vs. still being processed, you must be familiar with how the tax refund process works.
The IRS issues tax refunds within three weeks of filing a tax return in electronic form. The official waiting time for receiving a refund for tax returns filed on paper is four weeks.
During that time, you can keep track of your tax return status. So, if your tax return is being processed, you’ll likely receive your Refund on time, while the still-being-processed message suggests that the Refund is delayed for one reason or the other.
Let’s examine the differences between IRS ‘being processed’ vs. ‘still being processed’ more closely and debunk their true meaning.
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Monitoring Your Tax Return’s Status
The IRS created the Where’s My Refund portal that lets you track your tax return’s status. So, all you need to do to find out how long you must wait to receive a refund is enter your social security number, filing status, the refund sum, and the tax year.
The tool lets you monitor e-filing and paper tax returns and informs you that the IRS has received your documents within 24 to 72 hours.
Optionally, you can use the IRS2Go app to keep track of your tax returns from an iOS or Android device. The IRS will update your refund status once it receives your document.
The messages you’ll see will be the same regardless of the tool you use to check the status of your Refund.
What Does the ‘Tax Refund is Being Processed Message Mean?’
The Refund Status section of Where’s My Refund and IRS2Go apps will show the following message approximately 24 hours after the IRS receives your tax return:
‘We have received your tax return, and it is being processed.’
Followed by the following:
‘Please note: For refund information, please continue to check here or visit IRS.gov/Refunds. Updates to refund status are made no more than once per day.‘
This message suggests that the IRS hasn’t detected any issues with your tax return so far and that your Refund will be issued within the standard time frame. This message should be accompanied by Tax Topic No. 152, which suggests your tax return is still under review.
Tax Refund is Being Processed message will be replaced by the Refund Approved message if the IRS doesn’t detect any red flags during the review. The message will change once again to Refund Sent once the funds are on their way to your account.
Also, the IRS Code 846 should be added to your tax return transcript once processed and approved for Refund.
What Does the ‘Tax Refund is Still Being Processed’ Message Mean?
The Tax Refund is Being Processed message will disappear if the IRS detects a problem with a tax return.
It will be replaced by the following message:
‘Your tax return is still being processed. A refund date will be provided when available.’
Although vague, the message implies that the IRS needs over three weeks to issue a refund. This message usually disappears after a while if the IRS doesn’t need any additional documents from the taxpayer to resolve the issue.
Typos, incorrectly written total and taxable income sums, and additional identity verification can all explain why this message is displayed in the Refund Status section. IRS agents typically resolve these issues independently, so most of the time, no action is required from the taxpayer.
In case the issue isn’t resolved in a few months, the message will be replaced by this message:
‘We cannot provide any information about your refund.’
The Refund Status section displays the same message before a tax return is received, so don’t panic if you see this message a day or two after filing your tax return.
However, if this message replaces the ‘tax refund is still being processed message’. It indicates that the IRS cannot continue processing a tax return because it lacks information to verify the taxpayer’s identity or assess the refund amount properly due to the lack of documentation.
How to Fix the Tax Refund is Still Being Processed Message?
More often than not, you won’t have to do anything to change your refund status because the IRS will update it automatically once the issue is resolved.
The ‘tax refund is still being processed’ message sometimes appears due to a large number of tax returns the IRS is currently processing. So, you should wait up to six weeks to see if the refund status changes before taking any action.
Checking your account’s transcripts is the fastest to find out if any of your account codes are worrisome.
If you didn’t write the taxable income amount correctly or made a similar error, the IRS won’t need your assistance to fix the problem. But, seeing the tax code 420 or tax code 424 in your tax transcript is a reason for concern because they indicate your tax return might be audited.
Also, you may be asked to go through the additional identity verification if the agent can’t determine your identity with the information included in the tax return.
Taxpayers who attempt to withhold wages or claim refundable tax credits they’re not eligible for usually receive a letter from the IRS with the list of additional documents they must submit.
Interest Rates on Delayed Tax Refunds
The IRS received 26,421,000 individual tax returns in 2022, most of which were processed within the three-week period. Even so, millions of tax refunds for this fiscal year were delayed creating a backlog the agency rushed to clear before the beginning of the 2023 calendar year.
Taxpayers who don’t receive their tax refunds 45 days after the tax filing deadline should receive an interest rate on the delayed Refund. The interest rate is adjusted quarterly and varies between 6% and 7% of the Refund.
On average, taxpayers whose tax refunds were late received an additional $18 interest payment. So, the ‘tax refund is still being processed’ message might mean you’ll receive interest with the Refund, provided that the examination of your documents goes smoothly.
Frequently Asked Questions
It’s best to wait for a few weeks before contacting the IRS to inquire about the status of your tax return. In most cases, the ‘tax refund is still being processed’ message will be upgraded as soon as the IRS agent resolves the issue that caused the delay.
The IRS notifies all taxpayers via mail before initiating an audit. This message could indicate a pending audit only if the taxpayer receives an audit letter requesting additional information.
Final Thoughts
98% of tax returns filed in 2022 were processed and approved within the legal timeframe. So, unless you’re in the unlucky 2%, you don’t have to worry about the differences between the ‘tax refund being processed’ vs ‘tax refund is still being processed messages.’
You should also keep in mind that the IRS lacks the manpower to deal with all tax returns with the same level of efficiency and that the ‘tax refund is still being processed’ message could simply mean that the IRS needs more than three weeks to issue the Refund.
However, if your refund status doesn’t change for a few months, this message could indicate something wrong with your tax return.
Author:
Logan is a practicing CPA and founder of Choice Tax Relief and Money Done Right. After spending nearly a decade in the corporate world helping big businesses save money, he launched his blog with the goal of helping everyday Americans earn, save, and invest more money. Learn more about Logan.
