Tax forms from the federal government and many states may be delayed in the aftermath of the fiscal cliff legislation, one of the largest tax preparation chains warned.
Liberty Tax Service, a subsidiary of JTH Holding, Inc., warned of possible delays in the filing of tax returns due in part to the late congressional approval of the American Taxpayer Relief Act of 2012. Many of the changes to tax law affect the forms to be used for 2012 tax returns, and the IRS will need to work at an unprecedented pace in order to get the needed tax forms released to the various tax preparation firms and software companies, as well as to taxpayers.
The IRS had previously announced that it would not begin to officially process any tax returns until January 22, which is approximately one week later than has historically been the case. This late start, even if the IRS holds to the January 22 date despite the late-breaking tax changes, could mean delays of federal refunds anywhere from 10-21 days, when compared to prior years. In some cases, the delays for paper tax return filings may exceed those for electronically-filed returns.
Refunds will be delayed until at least February for almost everyone, Liberty Tax CEO John Hewitt said in a statement. That is the latest ever since the advent of 'national' electronic filing,
In addition, approximately 30 states are affected because their tax forms and instructions could not be finalized until the federal issues were resolved. Some states may not release their tax forms until the end of January (including California, Delaware, Mississippi and Vermont), while many other states are expected to release their forms no sooner than the second or third week of January (including Illinois, Maryland, Michigan, Ohio and Virginia).
This has been an epic beginning to tax season 2013, said Hewitt. Im starting my 44th tax season looking at the possibility of the worst delays in filing I have ever seen.
He added that his management team are ready to navigate these rough waters and company said its tax preparers are already ready to help taxpayers be prepared to file as soon as the IRS and states permit filing.
The fiscal cliff bill extends tax credits for families with children; extends unemployment insurance; extends the tuition tax credit for families; and extends other tax benefits that were scheduled to expire.
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