Alabama State Refund Delay 2012 – I’m Waiting Even Though I Moved Out of State!

by Kevin on May 5, 2012


If you’ve been following No Debt Plan for several years you’ll notice that several years in a row I wrote about the state of Alabama’s inability to pay my state tax refund to me in a normal amount of time. My tax return would be accepted and processed, but my refund would not be paid for what felt like a┬ámillennia.

Last year (well, technically, the last day of 2010) I moved out of the state of Alabama and into a glorious state with no state income tax: Tennessee.

My wife and I celebrated. Not only could we wear orange without fear of having our tires slashed or being randomly punched in the face, but we were finally free from the grasp of the state income tax delays.

Oh, how wrong we were. We could wear orange and enjoy a 5% raise (from not paying that income tax rate from Alabama), but we once again find ourselves ensnared in the incredibly slow grasp of Alabama’s Department of Revenue.


One Paycheck in Your Old State

My wife and I moved on December 30, 2010. You’d think all of our paychecks and all of that would have been fine leading up to that, but both of our employers paid us a paycheck from December 2010 in January 2011. Those checks, even though we were now in Tennessee, withheld normal Alabama state income tax. We were getting paid for the previous year’s (or week’s) work in the next year.

This happens every year at every employer; it’s normal. The only difference for us is we weren’t going to have any more income in Alabama throughout 2011.

All Taxes Paid to Be Refunded… Eventually

When you have a little bit of income plus some income tax withheld, but then you move and have no other income in that state, all of that income tax will be refunded to you. This is due to the allowances of income that states have (and just like the Federal government’s allowance that lowers your tax bill).

At the end of the day we paid $338 in income tax for two different paychecks. We didn’t earn another dime in Alabama — all of our income was being earned in Tennessee and we didn’t owe state tax on it. But that still meant we had to wait until the end of the year to file a tax return with Alabama in order to get our money back.

Alabama State Tax Refund Delay

We filled out Alabama’s 1040-NR. The NR stands for non-resident. Instead of the convenient online tax returns we had been submitting to the Federal government and Alabama during our time there, the 1040-NR cannot be processed electronically. I have no idea why, but part of me thinks it is to punish you for ever leaving the state.

No, our return had to be processed by hand.


I’ve been checking on the “Where’s My Refund?” website that Alabama’s Department of Revenue has, and I keep getting the same message:

Your tax return is being processed.

Oh really? Thanks, I hadn’t figured that out the last 5 years as you withheld my refund for me for weeks and months.

So I’m right back where we’ve been the last several years: I sent my return in on time, but there’s no telling when I’ll get it back. I’m not desperate for the cash (we knew this would happen and planned accordingly), but it is still incredibly frustrating to know my money is sitting in the state’s coffers while they figure out how to process my return. We’re crossing our fingers they don’t tell us there’s something wrong that needs to be re-submitted.

What about you? How long have you been waiting for your Alabama income tax refund?

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