March 4, 2026, 5:30 a.m. ET
For many Americans, tax refunds represent their largest annual payout. However, residents of specific states and Washington, D.C. might face delays in receiving theirs this year.
The landmark tax and spending legislation signed by President Donald Trump in 2025 unveiled numerous new tax benefits for middle-class citizens. Yet, several states are struggling with either adopting or rejecting these changes. Tax software and forms require extensive updates to reflect new provisions such as the expanded senior deduction, the exemption for tips and overtime, and the new auto loan interest deduction, where states have opted to align. Concurrently, the District of Columbia is in a contentious dispute with the federal government regarding its adherence to these new federal tax regulations.
Consequently, taxpayers should be aware: state tax refunds may experience delays.
Richard Pon, a San Francisco-based certified public accountant, stated that “State tax conformity will be the biggest hurdles as some states conform, some don’t conform and some only partially conform” to the new Trump tax laws.
Which States Are Anticipating Tax Refund Delays?
Residents in four states and the District of Columbia could experience delayed tax refunds. Below are the reasons:
- Idaho: Lori Wolff, an administrator within Idaho’s Division of Financial Management, indicated in a memo that reductions to the temporary tax-season workforce due to budget cuts are projected to extend tax processing times by 12-24 weeks and push back taxpayer refunds by as much as 6 weeks. She added that these delays could result in up to $7 million in additional refund-interest payments for taxpayers.
Moreover, Idaho Governor Brad Little did not sign the state’s conformity bill for federal tax laws until February 11, well after the IRS tax season began on January 26, by which point over 158,000 Idaho residents had already submitted their taxes.
Tax Commission Chairman Jeff McCray stated in a February 17 release, “The changes to forms and systems normally take nine months for the Tax Commission to complete. However, it’s a priority for us to make the updates and provide a plan for taxpayers to follow as soon as possible.”
- New York: An Intuit TurboTax software glitch, which was slated for resolution by February 4, might have hindered filings and caused some tax refund delays, as reported by customer complaints on various online forums and highlighted in local news segments.
- Oregon: The state’s Department of Revenue announced that processing of paper returns will not commence until at least the end of the current month, with initial refunds not expected before early April. The Department attributed this to the IRS’s tardiness in supplying the essential tax forms and data required for the state to configure its computer systems.
The Oregon Department of Revenue further indicated that a “small number of taxpayers” erroneously claimed an incorrect sum for the Oregon Kids Credit due to a form discrepancy. While asserting that this issue was identified promptly enough to avoid refund delays, the department cautioned that it would, if needed, amend the returns of individuals who claimed both the Oregon Kids Credit and one or more of the new federal deductions for overtime wages, tips, and new car loan interest.
- South Carolina: A caution on the Palmetto State’s Department of Revenue website states that tax processing is currently slower than usual because the state is not aligning with Trump’s new federal tax laws. Taxpayers must be particularly diligent in adjusting their state tax filings to re-include income that might have been federally deducted, such as tips, overtime, the expanded senior deduction, and auto loan interest, among other items. Failure to do so could necessitate filing an amended return, which in turn could delay a refund.
- Washington, DC: The District of Columbia is currently entangled in a dispute with the federal government, causing significant disruption to tax filing procedures. Late last year, D.C. elected not to comply with the new tax laws, but Congress subsequently voted to overturn that decision mid-tax season, a bill that President Trump signed into law on February 18. The Office of Tax and Revenue announced on its website that “Electronic and paper versions of the 2025 District income tax forms will be delayed.”
The D.C. Attorney General submitted an opinion contending that Congress’s reversal is invalid, citing, among other reasons, that the deadline for such action had already passed. Should this disagreement persist, D.C. Chief Financial Officer Glenn Lee warned that tax filing deadlines might be extended to September, potentially disrupting $400 million in cash flow for the D.C. government.
The resolution of this dispute carries significant implications for D.C. taxpayers. The National Taxpayers Union Foundation indicated that approximately 60,000 individuals who have already submitted their D.C. taxes might be required to refile.
Furthermore, the nonpartisan research and educational organization noted that almost 90% of taxpayers utilize the standard deduction, which stands at either $15,750 if Congress’s position prevails, or $15,000 if D.C.’s stance is upheld. Similarly, the local child tax credit would be $0 if Congress is deemed correct, or $420 per child if D.C. achieves its desired outcome.
Medora Lee reports on money, markets, and personal finance for USA TODAY. She can be contacted at [email protected]. To receive personal finance advice and business updates, subscribe to our complimentary Daily Money newsletter, delivered Monday through Friday.