NYS attributes refund delay to confusion with tax software firms

ALBANY — A wrinkle with the state’s inflation refund checks is delaying refunds for thousands of state taxpayers.

On Reddit, tax filing software discussion forums and elsewhere, people are asking why their refunds for state income taxes they paid in 2025 are delayed.

The state Department of Taxation and Finance said the issue is mainly with taxpayers who filed their returns through online software systems like TurboTax.

The state gets just under 11 million tax returns each year between late January and April 15. The majority use an accountant or other tax preparer to ready their return. Roughly 25% rely on online tax filing software systems, according to the department.

The question came down to whether the IRS would treat the inflation refund check that they received in 2025 as taxable income. The state exempts the checks from taxation.

"I think that contributed to there not being exact clarity on how the tax software companies should treat it," said department spokesman Darren Dopp.

The state issued 8.3 million inflation refund checks, worth between $150 and $400 depending on income levels, in October 2025.

Intuit, TurboTax’s parent company, released a software patch in the first half of February aimed at fixing the problem.

The wrinkle won’t affect most taxpayers.

With just over three weeks to go until the April 15 filing deadline, there are still 5 million taxpayers who haven’t filed their annual returns, according to the department.