States Delay Tax refunds

iVillage Member
Registered: 09-07-2009
States Delay Tax refunds
12
Thu, 02-18-2010 - 9:06pm

http://www.aolnews.com/article/cash-strapped-states-delay-tax-refunds-ny-says-its-an-option/19362112



Cash-Strapped States Delay Tax Refunds; NY Says It's an Option

Updated: 1 day 6 hours ago





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Michelle Ruiz

Michelle Ruiz Contributor


(Feb. 17) -- Death and taxes may be life's only certainties, but many taxpayers won't be able to count on a timely income tax refund this year, as struggling states impose delays on refund checks to help solve their budget crises.

As New York weighs a potential delay, two other cash-strapped states, North Carolina and Hawaii, have already announced they will put a hold on refunds until June and July, respectively, allowing them to retain funds longer and cover their budget shortfalls with hundreds of millions of dollars owed to individuals and businesses.

The move will allow Hawaii to reallocate the $275 million it saves in the short run to balancing its $721 million deficit. North Carolina's Department of Revenue, now in its second consecutive year of refund delays, said slow collection of taxes contributes to the delays -- and hurts an already $1 billion shortfall.

"We are managing the cash flow very carefully," North Carolina Revenue Secretary Ken Lay told the state's News and Observer newspaper. "We are managing the distribution of refund checks as well."

Lay also told The Associated Press, "When you're writing those checks to pay your bills, you want to make sure that you have enough in the account to pay each one of them."

In New York, where there is a $1.4 billion budget deficit, the pressure is on to alleviate the budget crisis before the fiscal year ends April 1. According to a spokesman for Gov. David Paterson, delaying refund checks next month is one option.

"A final determination hasn't been made at this point about which particular expenses will be delayed in the March portion of the year," Matt Anderson, Paterson's budget spokesman, said in reports published today.

The state has until June to issue the refunds before it has to pay interest on the money. Under a delay, a person filing on April 15 may not get a check until June 1. Anderson said it's too early to know how long checks will be delayed.

With so many people struggling financially, putting a hold on income tax refunds has drawn criticism.

"The refund checks amount to money that belongs to taxpayers. They haven't given the state permission to manage it for them," said an editorial in North Carolina's News and Record newspaper. " should have anticipated and planned for shortfalls. Time is money, and the money should be returned to its rightful owners on time."

Both New York and North Carolina point out that delays will not apply to those returns that have already been filed. New York has paid out $293 million in refunds so far to 281,000 taxpayers; North Carolina has issued more than $400 million.

But protest rages on, as the majority has yet to file.

"Such a policy hurts our local economies because businesses and families that boost consumer spending with their income tax returns will have to wait that much longer," New York State Assemblyman Marc Molinaro, R-Red Hook, told The Poughkeepsie Journal.

While there is still hope in New York that refunds will roll in on time, many Hawaiians and North Carolinians know that, as sure as there is death and taxes, they'll be waiting until summer before they see a return.

One commenter at the News and Record's Web site wondered, "Would the state be cool with it if I held on to my funds a little later than, say, April 15 so I can be sure to have sufficient funds in my accounts?"

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iVillage Member
Registered: 02-14-2010
Thu, 02-18-2010 - 9:32pm
Anyone notice anything else NY, NC and Ha all have in common?
iVillage Member
Registered: 09-07-2009
Thu, 02-18-2010 - 9:47pm
Oh I know that answer!
iVillage Member
Registered: 11-27-2009
Thu, 02-18-2010 - 10:15pm
I don't see Illinois on the list, I was sure I would.
iVillage Member
Registered: 09-07-2009
Thu, 02-18-2010 - 10:17pm
The remaining of that stimulus is going to be pushed through to pay for those unions health and pensions
iVillage Member
Registered: 11-27-2009
Thu, 02-18-2010 - 10:26pm
I can see that happening.
iVillage Member
Registered: 03-26-2003
Sun, 02-21-2010 - 9:19am

If the states go bankrupt, which is a real risk in the case of California, you'll find that NONE of the refunds will go out.

Smart thing is to make sure you don't overpay your taxes during the year. Pure and simple. It's smart economics.

The 3 Day

Sandy
iVillage Member
Registered: 11-27-2009
Sun, 02-21-2010 - 10:00am

Good advice.

iVillage Member
Registered: 09-01-2009
Sun, 02-21-2010 - 3:29pm
No, what do they have in common?

"Taxes are the price we pay for a civilized society."


       Justice Oliver Wendell Holmes

iVillage Member
Registered: 02-14-2010
Sun, 02-21-2010 - 4:26pm

I don't believe people should have to go out of their way to protect themselves

iVillage Member
Registered: 02-14-2010
Sun, 02-21-2010 - 4:30pm
Economic oppression it appears.

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