Policy
March 5, 2026
IRS refund delays in 2026 are hitting millions of taxpayers right now, with Where’s My Refund showing no updates, state tax refund delays adding up, and refund still processing messages that won’t move. The 2026 filing season is one of the most complicated in years, driven by IRS staffing cuts, new law complexity, and state-level backlogs. If your tax refund is under review, here’s what’s going on.
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Why 2026 IRS Refund Delays, State Backlogs, and Processing Issues Are Worsening
The IRS Is Running Short on Staff and Funding
IRS refund delays 2026 start at the top. A January 2026 bipartisan agreement would cut IRS funding by 9%, around $1.1 billion, compared to the prior year, on top of $42 billion in previously rescinded IRA funding. The agency also lost 25% of its workforce between January and May 2025.
The U.S. Treasury Inspector General for Tax Administration warned:
“Completing IT modernization projects, providing quality service to taxpayers, and enforcing tax laws with a reduced workforce and budget will be challenging for the IRS.”
Seven people served as IRS commissioner during 2025, more than in any other year in its 164-year history.
New Tax Law Is Making Things Slower
The 2025 One Big Beautiful Bill Act introduced retroactive deductions for tips, overtime, and auto loan interest, effective January 1, 2025. The IRS is still finalizing rules for several of these, and many employers haven’t updated reporting systems yet. Don Schneider, deputy head of U.S. policy at Piper Sandler, estimated OBBB will deliver $91 billion in retroactive tax relief in 2026, with $60 billion issued as refunds, all being processed by a smaller workforce. That’s a key reason so many filers are seeing refund still processing right now.
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State Tax Refund Delays by State
State tax refund delays in 2026 vary by location. Here’s the current situation:
Oregon
Paper processing won’t begin until end of March, with first paper refunds not expected until early April. The Oregon DOR confirmed the IRS was late delivering necessary forms in late 2025, preventing system configuration in time. E-filers can expect refunds within two weeks from mid-February.
South Carolina
Processing is slower because the state doesn’t conform to OBBB. The Where’s My Refund tool isn’t showing accurate status for many filers. Use MyDORWAY to check instead of calling.
Washington D.C.
The Attorney General issued an opinion on February 24, 2026 on House Joint Resolution 142, which disapproved D.C.’s temporary tax conformity act, creating processing uncertainty for local filers.
New York
TurboTax users couldn’t e-file state returns early in the season due to a software issue tied to New York’s 2025 Inflation Refund checks. Intuit confirmed a fix by February 4, 2026, but some delayed filers may still be waiting.
What to Do If Your Refund Is Still Processing
The IRS says most error-free e-filed returns are processed within 21 days. Past that, log into your IRS account to check for notices. Oregon filers should switch to e-filing to skip the paper backlog. IRS refund delays 2026 should ease toward April 15, but any tax refund under review will need a response to IRS correspondence before it moves forward.
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