What a federal shutdown could mean for your tax refund and how to avoid delays

For many families, a tax refund represents a significant financial boost.

But during a partial federal government shutdown, uncertainty can creep in, particularly for taxpayers waiting on federal refunds.

Local financial planner Triston Hasty-Grant, president of Waterstone Wealth Management and a Certified Financial Planner, says most refunds should continue moving. Still, there are scenarios where delays can happen.

Are Refunds Still Being Processed During a Shutdown?

The short answer: Yes, in most cases.

The Internal Revenue Service’s automated systems remain operational during a shutdown. That means electronically filed returns with direct deposit and no errors are typically processed within the standard 21-day window.

However, problems arise when a return requires manual review.

During a shutdown, staffing levels may be limited. Returns pulled for human review can sit longer than usual.

What Triggers a Manual Review?

Certain situations increase the chances your return will require additional review:

• Missing tax forms (such as a W-2 or 1099)
• Incorrect Social Security numbers
• Math errors
• Filing for the Child Tax Credit
• Filing for the Earned Income Tax Credit

By law, refunds that include certain refundable credits must undergo additional verification. That review process cannot be fully automated.

If federal staffing is reduced, those returns can move more slowly.

How to Check Your Federal Refund Status

Taxpayers can monitor their federal refund through the IRS “Where’s My Refund?” tool:

➡️ https://www.irs.gov/refunds

You will need:

• Your Social Security number
• Filing status
• Exact refund amount

The tool updates once daily and typically reflects status changes within 24 hours of e-filing acceptance.

If more than 21 days have passed since your return was accepted and there is no update, financial professionals recommend checking the tracking tool before calling the IRS.

If no movement appears after four to five weeks, it may be time to proactively contact the IRS directly.

What About State Refunds in Oklahoma?

A federal shutdown does not impact the Oklahoma Tax Commission.

Oklahoma taxpayers can check their state refund through the OkTAP portal:

➡️ https://oktap.tax.ok.gov

State refund timelines operate independently of federal funding disruptions.

If You Owe — Or Get a Large Refund

Hasty-Grant says many taxpayers focus on the “grand finale” — whether they owe money or receive a refund.

If you owe:

• It means not enough tax was withheld during the year.
• While writing a check is never pleasant, it may also mean you kept more of your paycheck throughout the year instead of giving the government an interest-free loan.

If you receive a large refund:

• That money was effectively over-withheld during the year.
• Some taxpayers prefer this forced savings approach.

There is no universal right answer — only what works best for your cash flow.

When Should You Be Concerned?

• Your refund has shown no movement for over a month
• You receive IRS letters requesting additional documentation
• You notice discrepancies in the tracking system

Experts say not to ignore the issue.

Penalties and interest can accrue on unpaid balances. While criminal consequences are rare and extreme, unresolved tax issues can become more complicated — and more expensive — over time.

Setting Yourself Up for Next Year

Financial professionals say the best strategy is proactive planning.

1. Review Your Withholding
After tax season, review your paycheck with your employer’s HR department.

• If you owed more than expected, increase withholding.
• If you received an oversized refund and would rather keep more money monthly, reduce withholding.

2. Keep Every Tax Document
Watch your mailbox beginning in January.

If an envelope reads “Important Tax Document Enclosed,” set it aside. Filing without all required forms increases the risk of manual review.

3. Plan for Investment and Retirement Taxes
Retirees often ask:

• How will Social Security be taxed?
• What are my Required Minimum Distributions (RMDs)?

These income streams are taxed under complex formulas. Planning ahead — especially for business owners and retirees — can prevent unpleasant surprises.

4. File Electronically With Direct Deposit
This remains the fastest and most reliable method for receiving a refund.