A new year brings two things to the minds of Americans: resolutions that won't be kept and filing taxes before April 15.
As a new tax season begins, the state of Alabama can see the light at the end of the "income tax refunds from 2008" tunnel.
The economy and the recession are the reason for the slow returns on refunds this fiscal year.
One of those delayed refunds belonged to Ray Gabriel of Gulf Shores.
"The department of revenue told me my refund was approved, but they don't have any money," Gabriel said.
He was one of the 11,774 taxpayers who were still waiting for their income tax refunds at the beginning of 2010.
Gabriel said he received his refund Jan. 14 after making numerous calls and waiting since Oct. 9.
"In good economic times when the refunds come in to be processed and issued there is a quick turn-around time," said Carla Snellgrove, public information manager of the Alabama Department of Revenue. "This is because revenue collections are able to meet the refund expenditures."
These expenditures come out of the Education Trust Fund.
"The ETF funds grades K-12, colleges and universities as well," Snellgrove said. "So there are payment priorities the ETF must make."
Snellgrove said refunds come after the ETF in the pecking order of priorities for the ADOR.
As of Jan. 15 ADOR has approved 7,347 refunds for issuance totaling $8,260,395.12.
These refunds will be issued as the ETF balances allow.
These refunds represent refund returns that were received under extension that ran through Oct. 15, 2009, for the 2008 tax year returns.
It also represents the amended refund returns for prior years, delinquent refund returns received after the Oct. 15 extension date and refund returns that had some type of issue that needed resolving before the refund could be approved.
The number of approved refunds grows each year in the still depressed economy.
"This year we have had larger refunds and the state has issued more refunds in dollar amounts than in past fiscal years," Snellgrove said. "We believe the significant reason for that is capitol losses that individuals realize during 2008, whether it is in stocks or real estate."
Tim Russell, revenue commissioner, said Alabama is the only state where investments sold at a loss can be filed as an income-tax refund.
In the fiscal year of 2007, 1,209,389 income tax refunds were issued totaling $489,093,769.
The fiscal year of 2008 issued 1,240,832 refunds totaling $517,973,346. The fiscal year of 2009 issued 1,265,403 refunds totaling $659,279,050.
"We don't have a particular fund that the funds can be issued from," Snellgrove said. "There is not a refund fund because anything like that would require legislation."
A boost to the economy and smarter investments by taxpayers are a possible solution to the problem of backed-up refunds.
A new addition for taxpayers in 2010 on the Alabama tax forms is a refund donation check-off for the Alabama Military Support Foundation and health care benefits.
"We have about 17 check-offs on the form for refund donations available to Alabama taxpayers," Snellgrove said. "Also for the 2009 tax year, a health insurance deduction will be available to small business employees."
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