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Tax filing delay shouldn't affect state revenue

CHARLESTON, W.Va. - An Internal Revenue Service delay in the opening of the 2013 tax filing season should not have a significant effect on state government revenue flow this year, a senior revenue official said Wednesday.

On Tuesday, the IRS announced it would delay the opening of this year's tax filing season by eight days to Jan. 30. The delay was due to the tax law changes passed Jan. 2 to avert the so-called fiscal cliff.

In addition to the opening delay, IRS officials said some taxpayers who take advantage of some special types of credits would have to wait until late February or March to file to allow the agency enough time to update its forms.

Those delays will likely affect state filings, too, because most people file their federal and state returns at the same time.

But state Deputy Revenue Secretary Mark Muchow said Wednesday he did not believe the changes would have a significant effect.

"I would expect little or no impact for West Virginia," he said.

This isn't the first time in recent years that the IRS has delayed the tax filing season.

In 2010, Congress waited until mid-December to pass a two-year extension of tax cuts and other tax credits designed to stimulate the economy. As a result, the IRS asked taxpayers to delay filing returns until mid to late February to give the agency more time to reprogram computers and account for changes.

That had a ripple effect on the state.

In January 2011, West Virginia's general revenue fund drew an $81.6 million surplus. However, much of that was due to the state not paying as many tax refunds as it had expected.

Because many people delayed filing tax returns, the state paid out just $6.7 million in tax refunds that month - well below the $34.5 million that had been forecast.

The opposite occurred the following month.

In February 2011, the general revenue fund suffered a $1.8 million shortfall due to taxpayers finally starting to file their returns. More returns meant more refund payments.  

As a result, personal income tax revenue fell $16.5 million below estimates. The state also ended up paying more in corporate tax refunds for the month than it collected, leading to a $15.8 million corporate tax deficit for the month.

But Muchow said he didn't feel the effect would be as significant this year because of the credits affected by the recent tax law changes.

The forms that will be delayed until late February or March include those tied to more obscure credits within the tax code. Those credits include residential energy credits, depreciation and amortization credits and forms tied to general business credits.

Muchow said the people who use those forms usually aren't the ones ready to file their taxes in January.  

"Even under normal circumstances, nearly all of these taxpayers would file their tax returns after February anyway," he said. "Most would file close to the April 15 deadline and many would opt for extensions of time to file given some of these complex provisions."

The Jan. 30 set by the IRS applies to both paper and electronic returns. Neither will be processed before the opening date.

IRS acting commissioner Steven Miller said in a statement Tuesday that taxpayers' best option is to file electronically.

Miller said e-filing and using direct deposit for refund payments will allow taxpayers to get their refund as quickly as possible.  

While the IRS delayed the opening date of this year's tax season, the change did not affect its closing date. As with past years, taxpayers will need to either file their return or file for an extension by April 15.

Contact writer Jared Hunt at or 304-348-5148.


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