California state delays income tax refunds
My wife and I filed our taxes this afternoon, this year we are motivated to get our forms in and get the refunds so we can keep making ends meet. Does this story sound familiar? The punchline at the end of this scenario was when our accountant informed us of a 30 day delay for our 2009 California state income tax checks to be processed. Upon further inspection, this feels a bit like wishful thinking as it is based on reconciling the massive $40B deficit in the budget which has been pending the past few weeks.
It is anticipated that as soon as the cash and budget problems are solved, the refund delay will be lifted. It is clear that part of this stalemate in Sacramento is linked to the Senate approving the current Stimulus Plan. They are linked because recent estimates say the massive stimulus plan will pump $4.5B in projects and tax incentives into California alone. Obviously this will infuse the state with much needed cash and help Sacramento close the gap on the budget.
Meanwhile, my wife and I wait for this financial log jam to clear. To be clear on the implications of this income tax delay that State Controller, John Chiang has employed, this includes any type of return regardless of the year of the return or issue. This is a complete freeze of funds, full stop.
What is looming over our head is that if the 30 days pass without the budget being approved the state has threatened to issue I.O.U.’s. They have only done this twice in the the state’s history; 1992 and the Great Depression.
And if you are wondering if they will issue your refund with interest, yes but only interest accrued after June 1st, 2009 (45 days after April, 15th, 2009). My wife and I have joked that if we have trouble paying the upcoming property taxes in April we should issue the county a I.O.U., it’s only fair, right?
Sited & Related Links:
State of California Franchise Tax Board | State Controller announces delay for tax refunds
Mercury News | Still no deal in California’s budget stalemate
China View | Obama pushes stimulus plan forth as Senate debate continues
The Sacramento Bee | Stimulus plan would give California $4.5 billion for infrastructure
02.20.09 UPDATE: meta-DAD | How does the new California budget affect families
February 12th, 2009 at 12:55 pm
[...] | What the new Stimulus Plan will mean for American families meta-DAD | California state delays income tax refunds meta-DAD | Stimulus Check Disbursement [...]
February 20th, 2009 at 4:29 pm
[...] Sited & Related Links: Los Angeles Times | California Budget Plan; Key Elements Los Angeles Times | The California Budget: A timeline for the events to come meta-DAD | California state delays income tax refunds [...]