North Carolina was the first state to announce that it will delay state income tax refunds and issue them based on its available cash flow.  We have originally heard that refunds may be delayed into July but the NC Department of Revenue website shows that they are currently processing refunds and managing cash flow.  The state has provided a link to check the status of your NC tax refund through their website.

Due to the strain on the states budgets throughout the country, we suggest that you adjust your tax withholdings to eliminate the possibility of having substantial over payments in either federal or state payments.  We have already seen several states over the past year that have issued IOU’s instead of actual refunds.    The problem with an IOU is that you can’t use that to pay your mortgage or put food on the table.

Many may have noticed that income tax refunds from the North Carolina Department of Revenue have not been being issued as quickly as in the past. In prior years, we have seen NC refunds with direct deposit and e-file in about two to three weeks. This year, the state is releasing refunds as cash allows and refunds may take up to twelve weeks.  As of May 18, the state shows that delays are being eliminated.  Most of the refunds are probably out by now, but extended return filings should receive timely refunds going forward.  For further information, please see the press release at http://www.dor.state.nc.us/press/delay_eliminated.html

As a planning tip, don’t over pay your tax liability. Good planning can keep these issues from becoming a problem. Try some tax planning and coaching this year to lower your tax liability and plan to minimize over and under payments.

To track your refund from the NC Department of Revenue, check their website for NC Refund Status.