4 States Where Your Tax Refund Could Be Delayed in 2026

Taxpayers, be warned: Your state tax refunds could be delayed this year.

The Trump administration has touted that taxpayers, particularly homeowners, will see a sizeable refund this year after enacting several new tax breaks. 

Early tax reporting has seen refunds average $2,290, up nearly 11% from the same time last year.

But depending on where you live in the county, you may run into issues getting your state tax refund back promptly. Four states, as well as Washington, DC, are experiencing delays—and all for very different reasons. 

Why your state return could be delayed

The four states experiencing delays with tax refunds include New York, Idaho, Oregon, and South Carolina.

Additionally, Washington, DC, is currently in a high-stakes legal and political standoff with Congress over its local tax code. The dispute began after the federal government passed the One Big, Beautiful Bill Act in July 2025, which introduced several federal tax cuts, including exemptions for tips and overtime wages. 

The district voted late last year not to conform to the new tax laws, projecting the changes would cost the district over $600 million in lost revenue.

However, Congress voted to reverse that decision and Trump signed it into law on Feb. 18. 

The fight over whether Congress' reversal is legit has since become heated. The DC attorney general put out an opinion saying it's not valid, partly because they missed the deadline. DC Chief Financial Officer Glenn Lee also warned that if this isn't sorted out soon, the district could lose out on a huge $400 million cash flow, and tax filing deadlines might have to be pushed back to September.

Here’s what’s causing problems elsewhere:

New York

Taxpayers who filed early found themselves stuck in a “processing” phase if they elected to use TurboTax software.

Late last year, New York inflation refund checks were mailed out as a one-time payment, but unfortunately, the software provider Intuit TurboTax didn't have the update installed to account for the refund checks.

Local news reports indicate that taxpayers experienced delays after getting stuck in a processing loop while trying to file. Although the company has implemented fixes to resolve the problem, anyone who has already filed and is still awaiting their refund should verify that their software is updated to the latest 2026 version before submitting.

Oregon

Taxpayers who elected to file paper returns won’t have their state income return processed until the end of this month, with refunds not expected to be returned until early April. 

Like DC, the Oregon Department of Revenue (DOR) is adjusting to the Trump administration's new changes. The department claims the IRS was late in providing necessary tax form information to the state agency. 

The impact seems to be affecting only paper-filed returns, however, so the department strongly advises residents to switch to electronic filing to bypass bottlenecks. 

Idaho

Much like the IRS itself, the temporary tax-season workforce that is hired to handle returns in the state has been reduced, given budget cuts. 

Lori Wolff, administrator in the state's Division of Financial Management, warned that these cuts have slowed tax processing by 12 to 24 weeks and delayed taxpayer refunds by up to six weeks. 

She suggested that these delays would cost taxpayers up to $7 million in increased refund‑interest payments.

Adding to the delay was Gov. Brad Little's reluctance to sign the state's bill to conform to the federal tax laws. He finally did on Feb. 11, well after the start of the IRS' Jan. 26 tax season and more than 158,000 Idahoans had already filed their taxes.

Like in New York, Idaho residents must now update their tax software and get new forms to comply.

South Carolina

Like DC, South Carolina is pushing back against Trump's new federal tax laws.

As of now, the state refuses to implement the new tax break, which includes overtime, tips, and the senior deduction. 

As returns typically begin with federal taxable income, residents who use third-party software or were unaware of the changes may have accidentally claimed Trump tax law breaks on their state returns. 

The state's Department of Revenue is requiring filers to manually add back those deductions as income on their 2025 returns. These add-backs are creating significant delays.