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Federal and Virginia Deadlines, Processing Times, and New Rebates

Tax season 2026 has been marked by significant changes at both the federal and state levels, with millions of taxpayers receiving refunds and new Virginia legislation providing additional tax relief. Whether you have already filed your 2025 tax return or are preparing to file, understanding the refund process, processing times, and new rebate programs can help you maximize your refund and avoid unnecessary delays.

Federal Tax Refund Processing: A Successful 2026 Filing Season

The 2026 federal tax filing season generally ran smoothly, with the IRS processing nearly 139 million individual tax returns and issuing more than 90 million refunds . The IRS successfully implemented extensive tax law changes despite significant operational challenges, including workforce reductions and leadership turnover .

Key Statistics from the 2026 Filing Season

According to National Taxpayer Advocate Erin M. Collins’s mid-year report to Congress, the filing season statistics demonstrate the scale of tax processing:

  • Individual Returns Processed: 138.6 million 

  • Refunds Issued: 90.4 million 

  • Average Refund Amount: $3,275 

  • Electronic Filing Rate: Approximately 98% 

  • Direct Deposit Rate: Approximately 98% 

By late March 2026, over 80% of refunds were issued in less than 21 days, with the average refund amount reaching $3,571 . Total refunds issued surpassed $202 billion, representing an increase of more than 10% compared to the previous year .

New Tax Provisions Affecting Refunds

The One Big Beautiful Bill (OBBBA) enacted in 2025 introduced several taxpayer-favorable changes that contributed to higher refund amounts in 2026 :

  • No tax on tips

  • No tax on overtime

  • No tax on car loan interest

  • A special tax deduction for seniors

  • Permanent extension of several tax provisions that had been set to expire

These provisions significantly benefited American families, with many taxpayers seeing higher refunds as a result .

Refund Challenges: Delays and Service Issues

While the filing season was largely successful, the National Taxpayer Advocate’s report identified several areas where taxpayers experienced challenges .

Suspended Returns and Processing Delays

More than 14 million individual income tax returns were suspended during processing for additional review . Over one million taxpayers did not receive their refunds within the IRS’s normal processing time, experiencing an average wait of about 5.5 weeks .

The IRS encourages taxpayers who are expecting a refund to include banking information when they file. Taxpayers who did not provide valid bank information can use online tools on IRS.gov to provide the necessary information to get their refund faster .

If a taxpayer receives a CP53E notice informing them that their banking information is missing or invalid, they can use their IRS Individual Online Account to resolve the issue quickly by providing accurate banking information. Once updated, the IRS will issue their refund, usually within seven days .

Direct Deposit Requirement and Paper Check Delays

In response to Executive Order 14247, the IRS began phasing out paper tax refund checks on September 30, 2025 . Most taxpayers must provide their routing and account numbers to receive refunds directly deposited into their bank accounts .

However, limited exceptions exist for specific situations involving hardships, legal requirements, or procedural requirements . Taxpayers who qualify for an exception can provide this information through their IRS Individual Online Account, which will allow the release of a paper check within one to two weeks .

Taxpayers should note: For security purposes, IRS employees cannot update bank account information over the phone or in person .

Telephone Service Challenges

Taxpayers had more difficulty reaching the IRS by phone during the 2026 filing season . Overall, the IRS received 48.1 million calls, telephone assistors answered only 9.9 million calls (21%), and the average wait time was 14 minutes . This compares unfavorably to the 2025 filing season, when 50.2 million calls were received, 12.4 million were answered (25%), and the average wait time was 8 minutes .

The hardest-hit telephone lines included:

  • Installment Agreement/Balance Due line: Only 31% of 3.4 million calls answered; average wait time: 45 minutes 

  • Taxpayer Protection Program line: Only 19% of 2.4 million calls answered; average wait time: 20 minutes 

Identity Theft Victim Assistance Delays

The report notes continuing delays of approximately 20 months to resolve identity theft victim assistance cases . At the end of the filing season, more than half a million cases were pending in inventory . For many low- and middle-income taxpayers, waiting nearly two years for a refund is not merely an inconvenience but a significant financial hardship .

Virginia Tax Refund: Deadlines, Processing, and New Rebates

Virginia Filing Deadline: May 1, 2026

Virginia’s individual income tax filing and payment deadline is Friday, May 1, 2026 . Tax Commissioner Kristin Collins strongly encourages taxpayers to file electronically, as it is the faster, safer option .

Electronically filed returns are typically processed within four weeks, while mailed returns may take up to ten weeks or longer .

Virginia Automatic Filing Extension

Virginia provides an automatic six-month filing extension to November 1 for most filers . No application is required. However, taxpayers must still pay any taxes owed by the original May 1 deadline to avoid penalties and interest .

Virginia Refund Processing Timeline

For taxpayers expecting a Virginia tax refund:

  • Electronic filing with direct deposit: Typically processed within four weeks 

  • Paper returns: May take up to ten weeks or longer 

  • Returns flagged for review or manual processing: Additional delays may occur 

Taxpayers can track the status of their Virginia tax refund through the “Where’s My Refund?” tool on the Virginia Tax website or by calling 804.367.2486 .

Virginia 2026 Income Tax Rebate

The 2026 Virginia budget includes a significant tax rebate for individual taxpayers. The budget amendments establish the 2026 Income Tax Rebate Fund with $499,040,000 in general fund appropriations .

Rebate Amounts

  • Individual filers: Up to $100 

  • Married couples filing jointly: Up to $200 

Eligibility Requirements

The rebate applies to taxable years beginning on and after January 1, 2025, but before January 1, 2026 . To receive the rebate, individuals must file their return on or before November 3, 2026 .

The rebate is limited to the amount of the taxpayer’s liability after the application of any deductions, subtractions, or credits . The information statement attached to the rebate checks will state: “The enclosed Tax Relief for Working Virginians was authorized by the 2026 General Assembly” .

Payment Timing

For taxpayers filing a return before July 1, 2026, rebates will be issued on or before October 15, 2026 . No interest will be paid on any rebate due .

Collection Provisions

Any refund issued under this rebate program is subject to collection under the provisions of the Setoff Debt Collection Act .

For those who filed their 2024 tax returns in 2025, the previous rebate provided $200 for single filers and $400 for married filers . The 2026 rebate is smaller but still provides meaningful relief for working Virginians.

Best Practices for Maximizing Your Refund

Filing Tips

  1. File electronically – Virginia Tax strongly recommends electronic filing as the faster, safer option 

  2. Choose direct deposit – Direct deposit is the fastest way to receive refunds from both the IRS and Virginia 

  3. Provide accurate banking information – Include valid direct deposit information on your return to avoid delays 

  4. Gather all W-2s, 1099s, and withholding information before filing 

  5. Include your Virginia driver’s license or ID number on your return to help process it more quickly 

  6. Verify the spelling of your name(s), SSNs, and calculations are correct 

  7. Use your current address if you have moved since filing your last return 

  8. File early to ensure the fastest possible refund if your return is selected for review 

Tracking Your Refund

  • Federal: Use the IRS “Where’s My Refund?” tool, IRS2Go app, or IRS Individual Online Account 

  • Virginia: Use the Virginia Tax “Where’s My Refund?” application or call 804.367.2486 

What to Do if Your Refund Is Delayed

  1. Check your status online using the appropriate tracking tool

  2. Verify your direct deposit information – If you received a CP53E notice, update your banking information through your IRS Individual Online Account 

  3. Watch for correspondence – The IRS may send notices requesting additional information

  4. Consider professional assistance – For complex issues or identity theft cases, professional help can be valuable

Additional Resources

For more information on tax filing, refunds, and compliance, visit: