Judy: Mondays the deadline for
most American taxpayers to file
their federal taxes.
Because of the pandemic and
bureaucratic hang ups, this tax
season is shaping up to be even
more complicated than normal.
John yang has the story.
Correspondent: While talks --
while taxpayers have to get
their payments and on time, many
refunds may be delayed this year
due to budget constraints,
staffing shortages, and
backlogs.
The irs started the year with
the backlog of about 10 million
unprocessed returns from last
year's tax season.
Elaine is a senior fellow with
the urban Brookings tax policy
center.
Thank you for joining us.
Most taxpayers are getting extra
weekend this year because the
15th, today, is a holiday in the
district of Columbia.
For someone who hasn't filed
yet, what is your top tip?
Correspondent: The first is
please do whatever you can to
get it in by the 18th.
Use this weekend to your
benefit.
The second is file your return
electronically.
And if you are owed a refund,
ask for that to be delivered via
direct deposit.
The reason you want to do this
is to try to keep your return
out of the backlog that you
mentioned at the top of the
program.
When the irs gets a paper return
income of the first thing they
had to do is transcribe the
information on it so that they
can begin processing it.
Your return could be sitting for
months before it even gets
looked at.
Correspondent: Why the big
backlog?
>> The first is the big amount
of paper the irs is dealing
with.
And percent of people file their
tax return by paper each year.
Sometimes they have to.
It has been rejected
electronically or someone tried
to file a false return with
their social security number.
Or someone claimed a dependent
they are claiming.
For whatever reason, this
creates a large workload for the
irs and the pandemic created
additional backlogs.
It not only lasted a lot longer
than typical, they were simply
unable to open the mail.
Another driver is the tremendous
amount of new work that the irs
has placed on them.
While they have done a
relatively great job of handling
it, it is something new.
They have delivered three
economic impact payments.
One of them was this year.
-- This tax year.
They started to deliver the
child tax credit.
Typically, they receive that
credit when they file their tax
return.
For this one time, they started
delivering checks to give you up
to half of your credit between
July and December.
And the one that probably makes
me the most upset is that
congress routinely passes laws
affecting tax filing very late
in the process.
In some cases, people have to
file an amended return which
goes back to adding more
paperwork onto the irs's desk.
Correspondent: You mentioned the
tax credit.
The irs was distributing
payments.
People collecting unemployment
because of the pandemic.
How have those complicated this
tax filing season?
>> All of it can make the impact
more difficult.
People have difficulty
remembering that they've even
gotten it.
Fill out a tax reform -- a tax
form.
We have to look through people's
bank accounts to see if they've
received them.
The child tax credit can, Kate
filing for the same reason.
We need to know how much you
already received so we know how
much you're going to get as a
refund on your tax return this
year.
In some cases, people who were
not required to file tax returns
need to file this year to claim
the child tax credit because for
the first time, it went to
families with very low incomes.
Employment complicates the tax
filing for families because in
many places, people do not know
the income is taxable.
They receive it and they of that
tax at tax time because they
haven't had any withholding
taken out during the year.
Correspondent: What else have
you been seeing?
Confusing people or problems
that have been cropping up.
>> One thing that has been
stressful for low income
families is employers who have
changed.
Last year, in 2020, people were
working for a construction
industry or housekeeping service
and they were considered an
employee.
During the time they were
employed or taxes were withheld,
the employee paid their fair
share of taxes.
This year, employers changed and
considered these employees to be
consultants.
That is a surprise to families
when they come in because now
they owe tax is on all of the
money they earned rather than
having had it withheld
throughout the year.
Even families that get
relatively large refunds from
the art income tax credit the
child tax credit end up owing
substantial amounts of taxes
this year.
Correspondent: Elaine from the
tax policy center, thank you
very much.
>> Thank you so much.