Gov. Lingle’s tax refund delay is her way of trying to fix a shortfall in the states budget. By holding state tax refunds until July which starts the 2011 fiscal year.
“The government has made it very clear they are gonna use your money for the first six months of the year to balance the budget,” explained Lowell Kalapa of the tax Foundation Hawaii.
This has many taxpayers very upset because they need that money with the state the economy is in.
While your Federal Income Tax Refund will be deliverd on time, it is just the state refund that will be delayed. Most state refunds are a lot less than the fed refunds, but it is still money people possibly counted on when spending the christmas.
Lowell Kalapa of the tax Foundation Hawaii offers this suggestion (if it is not too late already and you already received your final paycheck of 2009):
“So what people might want to consider is asking their payroll clerks for this last payroll, is to not withhold maybe any state taxes, right?” said Kalapa.
Just make sure you have met the witholding requirments for your income first so you don’t end up owing the state money.
“Not breaking any rules, just like her, she’s not breaking any rules, because they had 90 days to pay back the refund, you are not breaking any rules because you are just under-withholding this last payroll,” explained Kalapa. “It is juggling the books, if you will, to make it come out in favor of the taxpayer.”
California is also delaying tax refunds and several other states have or are talking about following suit.
Even though e-file doesn’t open until January 15th, if you have your final numbers for your income and witholdings then you can file your taxes now and the tax preparation service you choose will automatically e-file your tax return on Jan 15th when the IRS opens up e-file. The tax services offered on the right of this article (or below) are accepting early tax returns now with auto e-file and are open now ready for you.
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