IRS Withholds Tax Refunds: 3 Groups Hit Hardest by Decision

As the 2025 tax season is currently underway, a number of individuals might be anticipating a tax refund. Tax refunds are issued by the IRS when payments made exceed the actual tax liability. This scenario is more typical among freelancers who independently manage their tax filings rather than having deductions made by an employer. Generally, refunds are processed within 10 days of submitting your tax returns. Nonetheless, certain individuals might not receive a refund this year.

Individuals Unlikely to Receive Tax Refunds in 2025

The Treasury Offset Program is responsible for recovering debts owed to federal and state agencies. The total federal student loan debt stands at $1.7 trillion. In 2024, the program retrieved $3.8 billion in overdue debts. The IRS explains:

“Should your refund be greater than your combined outstanding tax liabilities, including accrued interest, you will receive the excess unless you have other overdue obligations such as state income tax, child support, student loans, or other federal non-tax debts, which will be deducted from any refund.”

The IRS notes, the following groups might not get their tax refunds:

• Individuals who owe state income taxes
• Individuals with outstanding student loans
• Individuals who owe child support

Income Tax Filing Deadline: April 15

The deadline to file your income taxes is April 15 this year, unless you have requested an extension. Refunds have commenced, and those without any outstanding debts should expect their refunds within 10 days. For those claiming the Child Tax Credit (CTC) or Earned Income Tax Credit (EITC), refunds might take longer due to additional documentation and verification required.

The IRS offers a “Where’s My Refund” tool that allows taxpayers to check their refund status online within 24 hours of filing. This tool helps track how quickly your refund is processed. However, for those who file by mail, it may take up to four weeks to access this tool and check the status of their refund.

Actions to Take if Contacted by the IRS

It is crucial during the tax season to pay attention if the IRS reaches out to you. Open any letters or notices they send promptly as they may contain important information about your refunds. Ignoring these notices can result in missing out on refunds. While receiving IRS communication can be alarming, especially during tax season, the IRS will outline necessary actions in their correspondence.

It is also vital to keep any notices you receive from the IRS for up to three years. Remember, the IRS will always contact you in writing, never through social media, which helps you keep your records organized and secure during a time fraught with financial scams.

The IRS aims to be accessible and responsive. If you have questions about your refund or the reasons behind the IRS contacting you, do not hesitate to get in touch with them.