Not to be a nag, but an Associated Press report underscores the importance of not overpaying your state taxes.
California is obviously getting the most attention right now because of its issuance of IOUs to taxpayers awaiting refunds.
But the flip side of the tax equation, plummeting tax collections, has prompted other states to delay processing income tax returns, and postponing delivery of refunds, for months so they
can make state ends meet, according to the AP.
Such refund-related budget machinations, however, could cost the cash-strapped states more in the long run.
"Some of the
tardy states are fast approaching a stiff deadline of their own: The
longer they wait, the more likely they'll have to pony up interest from
thinning state coffers," says the AP.
Impending deadlines: Georgia and Alabama, for example, are facing a mid-July
deadline to send hundreds of thousands of tax refunds or risk racking
up millions of dollars in interest.
Kansas, which had its own refund-related problems earlier in the year, also is slow in getting refunds out. Sunflower State tax officials say they are working to send out $31 million in refunds by next week.
And Maryland and Missouri had to use money from special accounts to meet their refund responsibilities.
Some Missouri refunds were issued courtesy of $250 million in federal economic stimulus money the state received.
Maryland, which is still working on several thousand refunds, has dipped into a $366 million reserve fund to get the tax money back to its residents.
All these delays have me wondering how many folks who were counting on that state money instead turned to refund anticipation loans.
