Congress has until the end of the week to pass a bill that will keep the government funded and avoid a shutdown in the heart of tax season.Congress has until the end of the week to pass a bill that will keep the government funded and avoid a shutdown in the heart of tax season. Congress has until the end of the week to pass a bill that will keep the government funded and avoid a shutdown in the heart of tax season.
It’s only been a few months since the last bout of government funding drama in Washington, but with the next funding deadline only a few days away and lawmakers gridlocked on an agreement, we might be seeing one very soon that could have major implications for your taxes.
The US narrowly averted a government shutdown in December after Elon Musk’s involvement resulted in a continuing resolution proposal being reworked heavily at the last minute. We’re now less than a month away from the new funding deadline set by that bill, and the signs of friction are already starting to show.
It is likely that the battle over government funding could come down to efforts by Democrats to curb Trump’s freezing of congressionally approved funds and his huge cuts to the federal workforce. Democrats and other critics have argued that Trump has no authority to do so and want provisions in a funding bill to stop him, but Republicans have strongly opposed any efforts to limit his authority.
Despite this stalemate, a vote in the House is planned for Tuesday, March 11, on a measure that would keep the government funded through September, which has Trump’s support, though Democrats have still voiced their opposition to it.
The government has shut down or suffered funding gaps at least 20 times in history, all in the past 50 years. The most recent shutdown lasted 34 days, spanning the end of 2018 into the start of 2019 during Trump’s first term. No shutdowns have happened since then but the threat of one has become increasingly common in the current political climate.
With a month left until the next funding deadline, read on to find out what might happen to your tax return during a shutdown. For more tax coverage and tips, find out what Trump’s External Revenue Service means for you and if your state has its own version of the child tax credit.
When is the deadline to fund the government?
Congress has until March 14 to pass legislation to keep the federal government funded and avoid a shutdown. This can be done with either a full federal budget or a temporary continuing resolution, the latter of which has become more common in a highly polarized Washington.
When is the deadline for filing my tax return?
As it is every year, you have until the end of the day on April 15 to submit your tax return to the IRS. This year, that falls on a Tuesday.
Certain parts of the country affected by recent natural disasters — including floods, hurricanes and wildfires — have had their tax deadlines extended, so make sure to check on the details for your specific area.
Will a government shutdown affect my tax return?
The impact that a government shutdown would have on tax returns is an open question. While there have been shutdowns in the past, not one has ever occurred during tax season.
Typically, a shutdown sees all nonessential government functions stop and the employees involved in those functions furloughed. A 2024 contingency plan released by the Treasury Department claimed that during a shutdown, essential IRS functions would continue but there’s no telling how things would actually play out until a shutdown actually happens.
Speaking with CNET, Tracey Spivey, a partner with accounting firm KPMG, said that in all likelihood, returns submitted electronically during a shutdown should be processed like normal. Returns that contain an error or taxpayers who choose to file via a hard copy could see a delay.
However, Jassen Bowman, an IRS enrolled agent and tax expert, told CNET in an email that delays are likely inevitable in the event of a shutdown, no matter how you handle your return. While he agreed that e-filing would be faster and that major delays would mostly be reserved for returns with errors, he warned that returns that need “human review” might not be sorted until the shutdown was over.
“During past government shutdowns, only ‘essential’ personnel were allowed to work,” Bowman said. “Most of these essential workers are IT staff. So if you e-file a return and choose direct deposit for your refund or pay online if you owe, there should be minimal delays, unless the e-file system flags the return for human review. In that case, the return would not be processed until after the government shutdown. The same holds true for anybody that files a paper return.”
Will a government shutdown affect my tax refund?
Any tax refund you’re set to receive will likely fall under the same possibilities outlined above. A potential delay would depend on how many IRS workers are furloughed during a shutdown but a delay is very likely if you don’t file electronically. Bowman also warned that people claiming certain tax credits, such as the earned income tax credit, could see substantial delays because the IRS typically requires more verification for these credits.
“Returns that claim certain types of credits, such as the Earned Income Tax Credit, tend to be flagged more than other returns due to identity verification requirements and IRS fraud prevention programs,” Bowman wrote. “Legitimate EITC claims are made by the most financially vulnerable Americans and so delays in receiving those refunds can have catastrophic impacts on families.”
What other IRS services would be impacted?
Beyond the potential delays in processing returns, Bowman noted, some other IRS services would be impacted by a government shutdown. “The most noticeable impact by consumers will be the shutdown of IRS call centers,” he said. “No customer service personnel will be working, not even at the special numbers for tax professionals. Therefore, it will be impossible to get anything fixed with the IRS.”
Bowman added: “If you’re waiting on a response to a letter, that will be delayed as well. Any scheduled appeals hearings, audit conferences and the like will all be canceled, further dragging out the resolution of any tax problems somebody might be experiencing.”
He said his best advice is to “file your tax return right now if you possibly can and if you have any outstanding IRS issues, call them immediately, before any shutdown occurs. This may not eliminate any future frustrations but it will help minimize the frustration by getting the ball rolling now.”
For more, see what the future might hold if pennies cease production.