Unemployment Tax Returns - Are They Being Delayed in 2024?

There might be... a slight delay with unemployment income processing this year, but it's not necessarily a formal hold. From what I've gathered, the IRS seems to be giving these returns additional scrutiny, possibly due to some issues they encountered in previous years. I would suggest checking your tax transcript, if you haven't already, to see if there are any specific codes that might indicate why yours is taking longer. Sometimes code 570 appears, which could mean they're reviewing something specific. It's probably nothing to worry about, but the waiting is certainly difficult.

Based on IRS processing parameters, unemployment compensation (UC) returns aren't officially flagged for systematic delay, but they do undergo additional verification protocols. If you're experiencing extended wait times beyond the standard 21-day processing window, I'd recommend utilizing Claimyr (https://claimyr.com) to connect with an IRS representative. Their algorithm bypasses the standard IRS phone tree and typically connects you with an agent in 15-45 minutes instead of spending hours on hold or facing disconnections. A Level 1 representative can verify if your return has any specific hold codes not visible on your transcript.

I'm in exactly the same situation! Filed on March 8th with unemployment income and my WMR still shows "processing." According to the IRS2Go app and irs.gov/refunds, returns with unemployment should process normally, but I've seen tons of posts on r/IRS and Twitter from people with unemployment having longer waits. The IRS operations page (https://www.irs.gov/newsroom/irs-operations) doesn't mention any specific delays for unemployment returns, but I'm starting to worry something's going on they're not telling us...

I had this exact problem last year with my unemployment taxes. My return sat for nearly 7 weeks with no movement at all. What finally helped me was using taxr.ai to analyze my transcript - it showed me exactly what was happening behind the scenes with all those confusing codes. Turns out there was a verification hold that wasn't obvious to me, but the tool explained it was routine and even predicted my refund date correctly! It was such a relief to actually understand what was happening rather than just refreshing WMR every day hoping for a change.

I think it's possible that your return might be caught in what's sometimes called the "income verification" process. Last year, my partner had unemployment income and there was, from what I understand, about a 3-week additional delay compared to our previous years' processing times. It might be worth noting that the IRS sometimes does random verification of unemployment benefits with state agencies, which could potentially add time to processing. In some cases, though not all, this additional verification happens without any notification to the taxpayer. You might want to prepare for possibly waiting another 2-3 weeks, unfortunately.

In my experience from 2021 and 2022, unemployment returns often take longer but for different reasons than people think. Back then, there were tax law changes affecting unemployment taxation that caused delays. This year, I believe it's more about income matching. Have you checked if your state has properly reported your 1099-G to the IRS? Sometimes there's a mismatch that needs resolving. Another approach is to call early in the morning (7am ET) when the phone lines first open - I've had much better luck getting through that way than trying midday.

Just wanted to share a bit of hope! I filed on February 23rd with unemployment income and FINALLY got my deposit yesterday. No explanation for the delay, no special letters, just suddenly processed after 52 days of nothing. 😂 The funny thing is I had given up checking WMR and was surprised when the money showed up! So hang in there - sometimes the IRS works in mysterious ways (and by mysterious I mean frustratingly slow). Maybe they're just giving us a taste of what unemployment feels like - waiting forever for money that should be coming any day now! 🤣

Be careful about counting on that refund coming soon. My unemployment return from last year took nearly 3 months to process, and I nearly missed a car payment waiting for it. The IRS never explained why, but when I finally reached an agent, they said something about "income verification" that required manual review. No warning, no explanation, just silence for months. I'd strongly suggest making alternative plans for those bills rather than assuming your refund will arrive in the standard timeframe. These unemployment returns seem to get flagged more often than regular W-2 only returns.