What does it mean when your refund is being processed

If you’ve submitted your federal tax return and are checking the IRS Where’s My Refund? tool to find out the status of your refund, you may be wondering what “your return is being processed” means.

It means the IRS “got your tax return, so you don’t have to sweat that there was an issue with them receiving it,” says Howard Samuels, a certified public accountant at Samuels & Associates in Florham Park, New Jersey.

Typically, the IRS processes most returns and issues refunds within three weeks or 21 calendar days of receipt. But recently, there have been logjams. One way to speed things along is to make sure you file electronically with direct deposit, avoiding a paper tax return, IRS commissioner Chuck Rettig said in a statement on January 10, 2022.

Here’s what you can do if you suspect your federal tax refund is delayed or you need more information about your return.

How to contact the IRS: ‘Your best bet is to call first thing in the morning’

If there’s a backlog, prepare to wait a few more weeks than normal, Samuels says. “At this point I would say sit tight for at least four to six weeks. After that, you may want to call the IRS to find out what’s going on,” he says.

In 2021, taxpayers who called to ask about their financial situations had just a 1 in 9 chance of being answered — and those who did get through lingered on hold for an average 23 minutes, according to an annual report from the Taxpayer Advocate Service.

“Your best best is to call first thing in the morning as soon as the IRS opens at 7 a.m. ET,” Samuels says. “I’ve also heard some people have luck when they call later in the day around 6 p.m. or 6:30 p.m. [Eastern] right before the IRS closes at 7 p.m.”

The IRS owes you interest on late refunds

If it takes a while for you to get your money from the government, there is a silver lining, Samuels says: “The law requires the IRS to pay interest on any delayed refund checks.”

If you don’t receive a refund within 45 days of the tax filing deadline, the IRS will owe you interest.

In 2020, the IRS owed many taxpayers interest on late refunds. The average interest payment was $18.

“If you’re waiting on a bigger refund, that could be real interest, and it compounds daily,” Samuels says.

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You’ve done your taxes and now you can relax while you wait for your refund.  Usually after 24 hours, you can start tracking your money using the “Where’s My Refund?” tool on IRS.gov.  You’ll need your social security number or ITIN, filing status and exact refund amount to check your status.  Once you provide the required information, you’ll most likely get a message saying, “Your return is being processed”.  You may even see the same exact message for days, weeks or months.  But what does it mean? 

The tracker goes through 3 stages

The “Where’s My Refund?” tool allows you to follow your return from the moment it’s received until your refund is issued.  The tracker goes through 3 stages: Return Received, Refund Approved or Refund Sent.  Here’s what each one means:

• Return Received – The IRS has received your return and it’s being processed.
• Refund Approved – They’ve processed your return and your refund has been approved.  It will also provide an actual refund date.
• Refund Sent – Your refund has been sent to your bank for direct deposit or a paper check has been mailed.

The tool is updated daily, usually overnight.  So, there’s no need to check multiple times a day.

When to expect your refund

Even though the IRS expects to issue most refunds within 21 days, some returns take longer to process than others.  Your refund may be delayed if:

• Your return has mistakes or is incomplete
• The IRS suspects identity theft or fraud
• Your Recovery Rebate Credit amount needs correcting
• Your return needs further review
• You claimed the Earned Income Tax Credit or Additional Child Tax Credit using 2019 income
• You filed Form 8379, Injured Spouse Allocation (can take 14 weeks to be processed)

Your return will also take longer to be processed if you file by paper.  To speed things up, the IRS strongly recommends e-filing your return and having your refund direct deposited into your bank account.  If you still need to file, give ezTaxReturn a try.  It’s the fastest and easiest way to do your taxes.

Should you call the IRS?

It’s hard to be patient, especially when you’re counting on your refund for something important.  But you should only call the IRS if it’s been more than 21 days since you e-filed or the “Where’s My Refund?” tool tells you to contact them.

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How long does it take if your refund is being processed?

Does processed mean approved?

What does it mean when my return is being processed?

What do I do if my refund is being processed?