Tax refund delays, for some Australians, waiting for their tax refund to appear in their bank account can seem like it’s dragging out for way too long, and some mistake receiving a receipt as a sign of an imminent ATO (Australian Tax Office) deposit into their bank. Here is some advice to help relieve some of the anxiety associated with waiting for their tax refund.
If you have enquired by email, you could also go to the section of ATO website where you can check the progress of your return via the ATO’s self-help services. But it will pay to point out that while the ATO may send you an email or text message to let you know if the tax return or refund has been delayed and why, or when the refund is on its way, it will never ask them to reply by SMS or email to provide personal information, such as your tax file number (TFN).
In most scenarios, documents lodged with the ATO online (including tax returns, refunds of franking credits and non-lodgement advice) should mostly be finalised within 10 business days. It is important to keep in mind that if paper forms are used, it can take anywhere up to 10 weeks.
Generally speaking, taxpayers can use the ATO’s online services via myGov to track the progress of their return in case their is tax refund delays. Once you are signed in, you should select “ATO services”, then from the home page select “Manage tax returns”, then select the income year you are checking. The status shows how the tax return is progressing. There is also a telephone number if you prefer to check that way and the number is 13 28 65 but you need your TFN to have your enquired handled over the phone.
Tax Returns Move Through Stages
It is important to be aware of the different stages a tax return will move through in order for it to reach your bank account and to analyze tax refund delays as well.
- In progress – Processing
They may see this status at two stages of processing:
- the ATO has received their tax return and has started processing it
- the ATO has finalised the tax return and is issuing a notice of assessment (an estimated assessment issue date is viewed by clicking the down arrow).
- In progress – Information pending
The ATO is collecting information to help it finish processing the tax return. It will contact your client if it needs more information.
- In progress – Under review
The ATO is manually reviewing the tax return to make sure everything is right before it finalises it. This may include reviewing prior-year returns. It will contact the taxpayer if it needs more information.
- In progress – Balancing account
The ATO is balancing the result of your client’s tax return with their accounts with it and other government agencies and calculating the amount it will refund or that needs to be paid. The ATO will contact your client if it needs more information.
- Issued – $ amount
Your client will be able to see their notice of assessment online, along with the date for payment and if they’re entitled to a refund.
What’s the difference between “processed” dates and “effective” dates?
In basic terms, the processed date is the date the ATO finishes processing a return and updates a taxpayer’s account.
If the taxpayer is entitled to a refund, the effective date is usually the date the ATO sends their refund to their financial institution. They’ll need to check with their financial institution to find out how long it may take to process the refund.
If they have a tax bill, the effective date will be the date their payment is due.
What if the tax return has taken longer than 10 business days. What can be done?
The ATO has a lot of returns to process, and it says it does its best to process tax returns within 10 business days, but there are reasons why it may take longer. For example, if:
- It needs to check information in a return. It may need to contact payers, financial institutions, private health insurers or the taxpayer themselves to confirm or cross-check information in their return. A taxpayer generally doesn’t need to take any action – if the ATO needs any additional information, it will let them know.
- The taxpayer has lodged tax returns for several years all at once. The ATO needs to process all of their returns so it can make sure their account is up to date before it issues any refunds or requests for payment.
- The taxpayer has entered into a debt or bankruptcy arrangement. If they have declared insolvency or entered into a Part IX agreement, the ATO needs to undertake additional checks before it can finalise a tax return.
- The ATO needs to check with other Australian government agencies (such as Centrelink or the Child Support Agency). By law, the ATO is required to pay part or all of your tax refund to other agencies if there are outstanding amounts. It is obliged to write to taxpayers to let them know if this is the case, and this practice could be reviewed.
Where possible, the ATO will let taxpayers know if it needs them to take any action, especially if it needs extra information to process a return.
Tax refund needed to pay outstanding bills?
Especially at this tax time, Australians may be anxious about getting some much-needed funds. If they think their situation put them under serious financial hardship, you could suggest they consider requesting priority process and the ATO might be able to help get the persons tax return processed quicker.