State tax refund check's (almost) in the mail

When will you get that state refund check? Officials say state income tax refunds should arrive earlier this year than last year, when many state taxpayers complained of long delays.
They aren't saying that some delays won't occur, but Bill Newton, acting director of finance, said that this year returns are being paid earlier. A major reason for this is because the Alabama Education Trust Fund, where tax refunds are stored, is a little more flush with cash this year.
That fund depends heavily on state income tax collections.
A major reason for last year's long delays in the state sending out refund checks came down to simple human nature: people who are owed money by the state want that money quickly, while people who owe the state money are not in as big a hurry to pay it.
"Most taxpayers that are due a refund file earlier than taxpayers that are liable for additional payments," Newton said in an e-mail response to questions from the Montgomery Advertiser.
That means the fund often experiences requests for refunds before it has received the payments from other taxpayers that it needs to pay them
While that can be a problem any year, surprisingly, it was exacerbated by last year's major downturn in the economy, leading to far more people filing early.
Because more taxpayers had capital losses, which can be written off on tax returns, in 2009, more were scheduled to receive refunds and more filed early.
While officials from the Alabama Department of Revenue, the department that handles tax returns, and the Alabama Department of Finance, which actually mails out the refund checks, say delays are still possible, they say the sort of months-long delays some taxpayers suffered last year are unlikely.
Before finance can even think about paying a tax refund, the Department of Revenue must process the return. That process can take time in itself. Once the return itself is processed, Revenue sends a list of taxpayers owed refunds to Finance, and Newton says that department tried to cut the checks as swiftly as possible.
Even if the state pays the refunds on time, according to the law, many taxpayers will feel the refunds have been delayed because the law gives the department plenty of time to pay the refunds.
"If the refund has not been paid by the state within 90 days after the due date, state law requires interest be paid by the state,"
That due date is April 15, not the date that the tax return is received. That means a return filed by Feb. 15 and due a refund could sit for five months before that refund is paid.
Those rules only apply if the return is filed by the deadline and has no errors. If the taxpayer is late in sending in the return, seeks an extension or makes mistakes on the return, the state is allowed more time to mail out the refund.