The problematic 2013 tax filing season is extending to state returns. At least that's the case for some filers in New Jersey.
While these special disaster tax considerations could help you get more refund money to use toward your storm damage repairs, around 13,000 New Jerseryites will have to wait up to three months for their tax cash.
The delay is the result of an effort by the state's Treasury Department to reduce what it says is the growing problem of tax-refund identity fraud.
And that three-month wait is this week's By the Numbers figure.
Edward Ricciardi, managing member of the Central Jersey Tax Services accounting firm in Howell, told the Asbury Park Press (via CPA Practice Advisor) that every client who is due a refund of more than $1,000 from the state has received a letter saying that their refund was being delayed.
New Jersey Treasury Department spokesman Bill Quinn said the fraud screening is an expansion begun last year that focused on people receiving the state's Earned Income Tax Credit, or EITC, payments.
The problem isn't taxpayers trying to claim inflated EITC refunds. Rather, New Jersey tax officials are looking to stop EITC claims by identity thieves using stolen Social Security numbers to file fraudulent claims before the real taxpayers file.
To ensure the claims are legitimate, New Jersey tax officials are asking for added documentation, such as W-2 forms, recent payroll stubs and copies of Social Security numbers used on the return.
Some taxpayers suspect that the delay is a ploy for the New Jersey to hang onto residents' tax money for as long as possible. After all, New Jersey Gov. Chris Christie did acknowledge that the state's plan to postpone the usual May payment of property tax credits until August was a cash-flow strategy that pushes millions in spending from the current state budget year into next year.
But, say New Jersey officials, the delay of state tax refunds is just about preventing fraudulent tax filings. "If there's a possible question about a refund, it's better to stop it before it's paid than to try to recover it after it's been paid," Quinn said.
Honest taxpayers no doubt agree with the state's goal to end tax fraud.
But those who are waiting an extra 90 days for their legitimate refunds no doubt wish the state could find an more expeditious way to combat tax filing crime.You also might find these items of interest: