President Donald Trump's recent executive orders, including a federal hiring freeze and a mandate for remote federal employees to return to in-office work, have raised concerns about potential delays in tax refunds during the 2025 tax filing season.
With the Internal Revenue Service (IRS) processing about 140 million tax returns annually and issuing refunds averaging $3,100 per filer, even minor slowdowns could affect millions of Americans.
Will Trump's Executive Orders Affect IRS Tax Filing Season?
One of Trump's latest executive orders places an indefinite hiring freeze across federal agencies, including the IRS.
This means new jobs at the agency cannot be filled, and job offers extended to employees set to start after February 8 have been rescinded.
Another executive order requiring federal employees working remotely to return to the office could accelerate early retirements at the IRS, further straining staffing levels. The hiring freeze also prevents the IRS from replacing workers lost to retirements.
Treasury Secretary Scott Bessent has the authority to lift the hiring freeze, but he has given no indication that he plans to do so.
With fewer employees available to process returns, taxpayers may experience longer wait times for refunds.
In January, Melanie Lauridsen, the vice president for tax policy and advocacy at the American Institute of Certified Public Accountants, wrote on LinkedIn that the freeze should not affect seasonal IRS employees, as they "should have already been hired and received training to begin working from January through May."
She added that the IRS had the option to reallocate workers from other departments to help with the processing of tax returns.
How Long Do IRS Refunds Take?
Typically, the IRS processes tax refunds within 21 days of receiving an electronically filed return. Paper returns can take six weeks or longer, the agency said. However, the timeline depends on multiple factors, including staffing, system updates and fraud detection measures.
In previous years, IRS staffing shortages have led to backlog issues. A 2023 report from the National Taxpayer Advocate Erin Collins found that the IRS had a backlog of almost 10 million unprocessed tax returns at one point during the pandemic.
Why Can Tax Refunds Be Delayed?
There are several reasons that a tax refund may be delayed, even without a hiring freeze.
Errors or Incomplete Information
Mistakes on tax returns, such as incorrect Social Security numbers or missing documents, can slow down processing. The IRS warns that even minor errors can result in delays.
Identity Theft or Fraud Detection
If the IRS suspects fraud, it may take additional time to verify the taxpayer's identity. Cases of identity theft have contributed to refund delays in past tax seasons.
Claiming Certain Tax Credits
Refunds for taxpayers who claim the Earned Income Tax Credit or Additional Child Tax Credit cannot be issued before mid-February to allow for fraud detection, according to the IRS.
Paper Filing Instead of E-Filing
Paper returns take significantly longer to process than electronically filed returns. The IRS reports that e-filed refunds are typically issued within 21 days, while paper returns can take up to eight weeks.
Bank Processing Times
Even after the IRS releases a refund, banks and credit unions may take additional time to deposit the funds, especially around federal holidays.
The IRS has not officially said the hiring freeze will delay tax refunds. However, with fewer employees available and a wave of potential retirements, tax professionals advise filing early and ensuring accuracy on returns to avoid unnecessary delays.
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