Alabama State Tax Refund: Finally!

by Kevin on April 12, 2009

After waiting nearly two months to get our state tax refund we finally received it a few days ago. It’s nice to have our money back.

A reader left a great comment with useful information from the Alabama Department of Revenue on another post, saying,

The Alabama Department of Revenue gets its money for income tax refunds from the state’s Education Trust Fund, because that’s where income taxes are deposited.

However, with the economic downturn of the past year or so and the proration that followed, there’s not enough money in the fund to recompense what taxpayers overpaid.

“The people who got their tax returns processed early got their refunds pretty quickly,” said Carla Snellgrove, public information manager for the Department of Revenue. “As we get closer to the filing deadline, we’ve had to deal with cash flow issues from the Education Trust Fund.

“It comes down to priority.”

First in line are public elementary and secondary schools; colleges and universities get paid next; and tax refunds are handled with whatever money remains.

Alabama law gives the state until July 15 to fulfill its refund obligations before interest begins accruing on those unpaid refunds. On average, 1 million out of 1.8 million tax filers get refunds. In this fiscal year, Snellgrove said about 629,000 refunds have been issued.

Snellgrove said, hopefully, revenue will soon pick up and keep pace with expenditures through the trust fund. Revenue comes in monthly via money withheld in employees’ paychecks. Self-employed Alabamians will file their quarterly taxes by the end of April.

“We have gotten a lot of phone calls from taxpayers who are accustomed to getting their state refunds quickly,” she said. “I think in the past several weeks, taxpayers have gotten concerned about reports that the state of California and Kansas were putting tax refunds on hold and that they didn’t know when they’d begin issuing them.

“We are issuing refunds, but they’re going out a bit more slowly.”

Just reading this reminds me of why I hate politics and poorly run government.

Here’s an idea: keep that refund money seperate from the education money.

Or here’s another idea: have the government live off of last year’s income and pay down debt. I recommend to my readers that they live off of last month’s income (have a one month buffer in your checking account), and I think it works for the government, too. Sorry, no, you can’t spend any more this year because you’re out of money. Get over it.

Anyways, off of my soap box! I’m just glad we’ve got our refund and I can roll the difference between what we owed the federal government and what Alabama owed us into our second mortgage. One step at a time…

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