Stimulus Check Delays: Millions Still Awaiting IRS Payments

An IRS backlog could mean millions of Americans are still waiting for stimulus money.

As Americans wait hopefully for signs that lawmakers will pass a bill authorizing a fourth stimulus check, there are still potentially millions of people waiting for some of the previous stimulus money to hit their bank accounts.

Unfortunately, the IRS is backlogged in processing 2020 tax returns, which could be affecting the ability of many taxpayers to receive the full amount of stimulus payments owed to them. Here's what you need to know.

An IRS backlog has led to underpayments of stimulus money

According to a recent report from the Taxpayer Advocate Service, the IRS has a huge number of tax returns that are still waiting to be processed. In fact, there are reportedly around 35 million returns submitted by individuals and businesses that are waiting to be manually processed by an IRS employee.

The pending returns include 16.8 million paper tax returns that have not been processed at all. It also includes 15.8 million returns that the IRS started processing but that will require additional review by an agent. And it also includes another 2.7 amended returns that the IRS has not even looked at yet.

The IRS has such a large backlog because many IRS agents were subject to an evacuation order during the COVID pandemic. Workers were not able to get to IRS facilities to process these returns in a timely manner.

Unfortunately, that has left a large number of people waiting for refund checks -- and waiting for stimulus funds. See, while many people received their payments via direct deposit or check, the IRS didn't necessarily have everyone's correct contact information or accurate details about the number of dependents they had and the amount of money they were entitled to.

Taxpayers who didn't receive the correct amount of stimulus checks were able to claim them on their 2020 taxes. This was referred to as claiming a Recovery Rebate Credit. And the IRS estimated that more than 8 million people are entitled to claim these credits.

Unfortunately, many of those people may have their tax returns pending processing. And until the IRS gets to those returns, they will be left waiting for the stimulus money that's supposed to help them cope with the pandemic's financial consequences.

Taxpayers whose returns are still pending can use tracking tools on the IRS website to determine the status of their return and their refund. You will need to provide your Social Security number, your filing status, and the exact amount of your pending tax refund in order to use this tool.

Unfortunately, there's little that you can do but wait for the IRS to process your return if your stimulus payments are still pending. "For taxpayers who can afford to wait, the best advice is to be patient and give the IRS time to work through its processing backlog," the National Taxpayer Advocate wrote in her mid-year report to Congress.

If you're hoping for more immediate relief, you can also check into other federal and state benefits that may be available in the interim.