Will My Tax Refunds Be Affected by the 2018 Government Shutdown?

tax refunds government shutdown


Your tax refunds will likely not be delayed or otherwise impacted by the 2018 government shutdown, which officially began at midnight on Saturday, December 22.

According to Ed Mills, Washington policy analyst at Raymond James, an investment bank and financial services company, the government shutdown will not affect your tax refunds as long as it doesn’t last too long. To MarketWatch, he said, “It seems extremely unlikely a government shutdown will have an impact, especially as the issue likely gets resolved before most people will receive their W2s.” Given that employees receive W2 forms as late as January 31, it seems extremely unlikely that the government shutdown would last that long; the longest government shutdown in history took 16 days in 1991.

If the government shutdown were to last a “very long time,” as Donald Trump has suggested it might, then it does have the potential to delay tax refunds — though again, the government would have to be partially shut down for a significant length of time, such as ten days or longer.

In 2013, when the government shutdown lasted 16 days, there were over $2.2 billion dollars in delayed tax refunds. 

Here’s what you need to know about how the IRS will be affected by the 2018 government shutdown:

Here Are the IRS Activities That Will Halt During a 2018 Government Shutdown

According to Alistair Nevius, the editor-in-chief of the Journal of Accountancy, these are the IRS activities that will shut down during the 2018 government shutdown:

  • Issuing refunds;
  • Processing Form 1040X amended returns;
  • All audit functions and examinations of returns;
  • Processing paper tax returns that do include remittances; and
  • Taxpayer services, such as answering taxpayer questions.

Nevius writes,

“Certain IRS activities will continue during a shutdown, including activities already funded outside of the Continuing Appropriations Act and activities necessary for safety of human life or protection of government property. These activities include continuing to complete and test upcoming filing year programs; processing electronic returns, up to the point of refund; processing paper tax returns through ‘batching’; processing remittances; and maintaining criminal law enforcement operations.”

Here’s Who Will Be Affected by the Partial Government Shutdown

Here are the federal departments that have been shut down, as of midnight on December 22:

  • Department of the Treasury
  • Department of Agriculture
  • Homeland Security Department
  • Department of the Interior
  • Department of State
  • Department of Housing and Urban Development
  • Department of Transportation
  • Department of Commerce
  • Department of Justice

According to CNBC, around 420,000 federal workers at agencies including the FBI, TSA, DEA, and Department of Homeland Security will continue to work without a regular paycheck, and might be without a paycheck for weeks, depending on how long the shutdown could take.

What’s more, CNBC notes that an additional approximate 380,000 federal workers will be placed on temporary leave without receiving pay, including many workers for NASA and the Department of Commerce. Included in that list of employees would be those who work for the Forest and National Park services, those who work for the IRS, and those who work for Housing and Urban Development.

However, you don’t have to worry about your holiday packages arriving on time. According to Vox, the Post Office will continue to run as usual throughout the government shutdown, because it’s sourced by an independent source of revenue, and therefore isn’t impacted by the annual appropriations process.

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