For some clients, waiting for their expected tax refund can seem to drag out interminably, and some mistake receiving a receipt as a sign of an imminent ATO deposit into their bank. So if you have a client who has a bad case of ants in their pants, the following could go some way to allay their tax refund anxiousness.
If they have enquired by email, you could send them the URL of this page, or this ATO web page (where they can check the progress of their return through the ATO’s self-help services). But it will pay to point out that while the ATO may send them an email or SMS (text message) to let them know if the tax return or refund has been delayed and why, or when the refund is on its way, it will never ask them to reply by SMS or email to provide personal information, such as a tax file number (TFN).
In most cases, documents lodged with the ATO online (including tax returns, refunds of franking credits and non-lodgment advice) should generally be finalised within 10 business days. (Note that if paper forms are used [yes, that still happens], it can take up to 10 weeks.)
Generally, taxpayers can use the ATO’s online services via myGov to track the progress of their return. Once they are signed in, they should select “ATO services”, then from the home page select “Manage tax returns”, then select the income year they are checking. The status shows how their tax return is progressing. There is also a telephone number if they’d prefer to check that way — 13 28 65 (they’ll need their TFN).
Returns move through stages
Generally, a return will move through the following stages:
- In progress – Processing
They may see this status at two stages of processing:
- the ATO has received their tax return and has started processing it
- the ATO has finalised the tax return and is issuing a notice of assessment (an estimated assessment issue date is viewed by clicking the down arrow).
- In progress – Information pending
The ATO is collecting information to help it finish processing the tax return. It will contact your client if it needs more information.
- In progress – Under review
The ATO is manually reviewing the tax return to make sure everything is right before it finalises it. This may include reviewing prior-year returns. It will contact the taxpayer if it needs more information.
- In progress – Balancing account
The ATO is balancing the result of your client’s tax return with their accounts with it and other government agencies and calculating the amount it will refund or that needs to be paid. The ATO will contact your client if it needs more information.
- Issued – $ amount
Your client will be able to see their notice of assessment online, along with the date for payment and if they’re entitled to a refund.
What’s the difference between “processed” dates and “effective” dates?
In simple terms, the processed date is the date the ATO finishes processing a return and updates a taxpayer’s account.
If they’re entitled to a refund, the effective date is usually the date the ATO sends their refund to their financial institution. They’ll need to check with their financial institution to find out how long it may take to process the refund.
If they have a tax bill, the effective date will be the date their payment is due.
Their return has taken longer than 10 business days. What can they do?
The ATO has a lot of returns to process, and it says it does its best to process tax returns within 10 business days, but there are reasons why it may take longer. For example, if:
- It needs to check information in a return. It may need to contact payers, financial institutions, private health insurers or the taxpayer themselves to confirm or cross-check information in their return. A taxpayer generally doesn’t need to take any action – if the ATO needs any additional information, it will let them know.
- The taxpayer has lodged tax returns for several years all at once. The ATO needs to process all of their returns so it can make sure their account is up to date before it issues any refunds or requests for payment.
- The taxpayer has entered into a debt or bankruptcy arrangement. If they have declared insolvency or entered into a Part IX agreement, the ATO needs to undertake additional checks before it can finalise a tax return.
- The ATO needs to check with other Australian government agencies (such as Centrelink or the Child Support Agency). By law, the ATO is required to pay part or all of your tax refund to other agencies if there are outstanding amounts. It is obliged to write to taxpayers to let them know if this is the case, and this practice could be reviewed.
Where possible, the ATO will let taxpayers know if it needs them to take any action, especially if it needs extra information in order to process a return. And remember, there is also a telephone number if your client really wants to check for themselves — 13 28 65, but the caller will need their TFN and perhaps other identity credentials.
Tax refund needed to pay outstanding bills?
Especially at this tax time, clients may be anxious about getting some much needed funds. If they think their circumstances put them under serious financial hardship, you could suggest they consider requesting priority processing and the ATO may be able to help get their tax return be processed quicker.