State Refund Delays in 2026: What Taxpayers Should Know

Millions of Americans anxiously wait for their tax refunds each year, looking for opportunities to recoup some of the money that they’ve paid into the system over the previous 12 months. Those refunds are often used to fund vacations, catch up on bills, pay down debt, and boost their savings. Early reports suggest that refunds may be slightly larger this season, with averages approaching $2,300 in some cases. But depending on where taxpayers live, getting that money back may take longer than expected.

Several tax filers can expect state refund processing delays this year due to a mix of policy changes, challenges with technology, and staffing issues. These complications have slowed the processing pipeline in certain jurisdictions, even while many federal refunds continue to move forward normally.

Find out more about which four states are expected to experience tax refund delays, and why tax refunds are delayed today.

New York: Software Issues Complicate Early Filings

Early filers are experiencing the most 2026 tax filing issues in New York. The Empire State is reporting issues with tax preparation software, which has led to a delay in processing. Some taxpayers who submitted returns using third-party software, especially TurboTax, have encountered a processing loop after the system failed to account for previously issued inflation refund checks.

The software initially lacked the necessary updates, which has led many early submissions to get stuck in the state’s processing system. Even though some updates have been released, taxpayers who filed before the fix may still experience slower refund timelines until their returns are manually corrected or reprocessed.

The situation highlights how heavily modern tax filing relies on integrated software systems. When those systems fall out of sync with updated tax rules or prior payments, it can create backlogs that take weeks to resolve.

Oregon: Paper Filers Facing Longer Waits

While the problems in New York seem to relate to digital filing software, the biggest delays seem to be impacting filers who filed paper returns. The state’s Department of Revenue reported that paper filings will not be processed until later in the tax season, with many refunds not expected until early April.

Updated tax forms seem to be the main reason for the slowdown. Many federal agencies were delayed in delivering key documents. This delay forced the state to postpone processing while waiting for updated systems. Electronic filers have generally avoided the worst of these delays, reinforcing the federal government’s long-standing recommendation to file digitally whenever possible.

For filers in Oregon who still haven’t filed their return or plan on filing a paper return, switching to a digital return may be the best option.

Idaho: Staffing Cuts and Late Policy Changes

Idaho’s refund delays don’t appear to have anything to do with processing systems. Instead, there are issues with the number of people on hand to handle the influx of returns. Budget cuts reduced the temporary workforce typically hired during tax season, leaving fewer employees available to process incoming returns. With fewer workers handling filings, processing times have slowed noticeably.

At the same time, the state adopted changes to align its tax code with new federal rules later than expected. Many residents had already filed their returns before the state finalized its conformity legislation, which created additional work for administrators who must now reconcile those filings with the updated rules. Idaho officials have warned that residents should expect delays of up to six weeks.

South Carolina: Manual Adjustments Creating Bottlenecks

Finally, South Carolina residents should expect state refund processing delays, but not because of system issues or even a lack of staffing. Instead, residents of the Palmetto State stand to face delays in receiving their refunds because of a policy decision. South Carolina officials decided not to fully adopt certain new federal tax provisions. Since state taxes typically start with federal taxable income, this mismatch means some deductions allowed at the federal level must be manually reversed on state returns.

This decision is especially problematic for select employees in South Carolina. The state’s decision not to fully adopt policy decisions means adding back deductions such as tips, overtime, or other income categories when filing their state return. If these adjustments are not completed correctly, the return may require manual review or even an amended filing.

What Taxpayers Can Do to Avoid Refund Delays

Currently, these are the only four states expecting delays, and even in these states, there are steps that taxpayers can take to reduce the risk of complications. Filing electronically with direct deposit remains the fastest option, as it allows tax departments to process returns automatically without manual handling.

If filing digitally, it’s wise to make sure that your software is completely up to date before submitting your return. Many delays this season have been linked to outdated forms or systems that did not reflect recent tax changes. Verifying personal information and double-checking deductions can also prevent returns from being flagged for manual review. For most taxpayers, returns will still arrive, though they may be slightly later than usual.

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