For many Americans, a tax refund is the biggest single payment they receive all year. But if you live in certain states — or in Washington, DC — you may have to wait longer than usual to receive it.
The delays stem largely from how states are responding to President Donald Trump’s new federal tax and spending law for 2025. While the law introduced several middle-class tax breaks, states must decide whether to adopt those changes, partially conform to them, or reject them altogether. That process has created confusion, technical challenges, and in some cases, refund delays.
Why State Refunds Are Slowing Down
The new federal law includes provisions such as:
- An expanded senior deduction
- No federal tax on tips and overtime
- A new deduction for auto loan interest
States that follow federal tax rules must update their own tax codes, forms, and software to reflect those changes. States that do not conform must ensure taxpayers correctly adjust their state returns to avoid errors.
“State tax conformity will be the biggest hurdle,” said certified public accountant Richard Pon. “Some states conform, some don’t, and some only partially conform.”
Updating tax systems is not a quick fix. It often requires months of programming changes, revised forms, and public guidance — all while tax season is already underway.
States Warning of Tax Refund Delays
Taxpayers in several states — plus the District of Columbia — are being advised to expect slower processing times.
Idaho
In Idaho, budget cuts reduced temporary staff hired for tax season, slowing processing times by an estimated 12 to 24 weeks. Refunds could be delayed by up to six weeks.
Governor Brad Little signed the state’s conformity bill on February 11 — after tax season had already begun and more than 158,000 residents had filed. According to Tax Commission Chairman Jeff McCray, updating forms and systems typically takes nine months, but officials are working to accelerate the process.
New York
In New York, some taxpayers reported delays linked to a software issue involving TurboTax. Although the problem was expected to be resolved in early February, filing disruptions may have slowed refunds for some residents.
Oregon
The Oregon Department of Revenue announced that paper returns would not begin processing until late in the season, with the first refunds expected in early April. Officials cited delays from the IRS in providing required forms and data needed to program state systems.
Additionally, a small number of taxpayers incorrectly calculated the Oregon Kids Credit due to a form issue. While most refunds should not be affected, adjustments may be required in certain cases — potentially slowing payments.
South Carolina
In South Carolina, the Department of Revenue warned that processing times are longer because the state is not conforming to the new federal tax law.
Residents must manually “add back” certain deductions that were allowed at the federal level but not at the state level, including deductions related to tips, overtime, senior benefits, and auto loan interest. Mistakes could require amended returns, further delaying refunds.
Washington, DC
Washington, DC is facing the most complicated situation. The District initially voted not to conform to the federal changes. However, Congress later voted to overturn that decision mid-season, and President Trump signed the reversal into law on February 18.
The District’s Office of Tax and Revenue announced delays in both electronic and paper tax forms while the dispute is resolved.
DC’s Attorney General has argued that Congress acted outside its authority due to timing restrictions. Meanwhile, Chief Financial Officer Glenn Lee warned that if the issue remains unsettled, filing deadlines could be pushed back to September, affecting roughly $400 million in government cash flow.
Approximately 60,000 residents who have already filed may need to refile, according to the National Taxpayers Union Foundation.
The outcome could significantly affect taxpayers. Nearly 90% of filers take the standard deduction, which could differ depending on how the dispute is resolved. The local child tax credit is also at stake.
Federal Refund Trends
As of March 24, taxpayers nationwide had received $172.26 billion in federal refunds. However, that total is down $16.4 billion — about 8.7% lower than the same period last year.
While federal refunds continue to flow, state-level complications are creating uncertainty in certain parts of the country.
What Taxpayers Should Do
If you live in one of the affected states or in Washington, DC:
- Monitor updates from your state’s Department of Revenue
- Double-check whether your state conforms to federal deductions
- Be prepared for longer processing times
- Avoid filing amended returns unless necessary
Tax refunds remain a critical financial boost for many households. But this year, depending on where you live, patience may be required.
