Most income tax refunds have been paid

There has been a slowdown in paying individual income tax refunds because of the state’s precarious finances.

While revenue officials are not allowed to discuss individual tax cases, most refunds from uncomplicated individual state income tax returns for 2008 have been paid, or soon will be, Revenue Commissioner Tim Russell said last week.

Because of the recession, Alabama’s income tax collections this year have been anemic. In fact, they’re less than the previous year, requiring careful management of taxes that fund education first and then refunds.
Hundreds of thousands of refunds were slowly released because of cash flow problems this year. Because returns would be so slow in being released, the revenue department advised it would pay 4 percent interest on any refund not made by July 15.
Refunds from uncomplicated federal returns for 2008 were electronically deposited within a week or 10 days of returns being e-filed, but state refunds from uncomplicated returns that were filed early often took more than six weeks to receive.

Revenue spokeswoman Carla Snellgrove said the department has issued 1.3 million individual refunds totaling $659.3 million so far this calendar year.

Earlier this month, about 10,000 refunds were released to the comptroller for payment, she said. The refunds were through Sept. 30 and should be paid by the end of October. Refunds are released when funds become available out of income tax collections.

The revenue department batches refunds for payments. During two days in early October, 15,411 refunds worth $20.3 million were issued, and on one day, Oct. 15, another 16,365 refunds were issued totaling $16.8 million.

Snellgrove said any complicated tax return or a return with a filing extension would not be completed quickly but those were few in number.

“Most individuals will have been paid,” Snellgrove said.