Image Courtesy: jacreative

Need another reason to adjust your federal and/or state tax withholding? How about because you may not get your money back when you expect it.

Due to the recession and falling tax collections, some states are having a problem making ends meet.

One of the solutions they are turning to is delaying the payment of state tax refunds.
Another cause of the delay is that due to budget deficits in many states, the revenue departments have had to reduce their workforce.

Even though they may have the money to pay, they don't have enough employees to process the tax returns. Georgia Revenue Commissioner, Bart Graham, said his department had to cut about 280 jobs since October. Of those, 150 where processors who helped file refunds.
I did not have any problems getting my refund from the State of Georgia but some people who filed later in the year will still have to wait. More than 320,000 refunds still need to be processed.

What can you do to avoid this problem next year?

Adjust your W-4 Withholdings
. The number of allowances you claim will affect the amount of money taken from your paycheck. The best way to determine how many allowances you can claim is to use the IRS Withholding Calculator. If you are not sure how or where to go to adjust your W-4, you should contact your Human Resources or Payroll department.

I used to look forward to getting a nice fat refund check from the government. Now, I would much rather have a larger paycheck throughout the year and get either a small refund or no refund at all.

Jonathan over at My Money Blog posted a photo of his California Tax Refund IOU.


  1. RB @ RichBy30RetireBy40 // July 12, 2009 at 8:35 PM  

    At least the IOU is paying a 3.75% rate of return! Double your typical 1 yr CD!

  2. Ariel // July 22, 2009 at 5:10 PM  

    I had to pay in this year in GA. It took them almost 4 months to cash my check. That is ridiculous.