An error in an electronic payment system caused 66,780 state individual income tax refunds issued on Tuesday, March 12 to be issued a second time on Wednesday, March 13.
The affected refunds were issued electronically through the ACH Clearinghouse and most taxpayers received the funds by direct deposit and on debit cards. A few may have received checks from their financial institutions.
How much money was involved?
The system error caused the issuance of more than $26 million in duplicate tax refunds.
Has the problem been solved?
The error was identified early on Wednesday, March 13 and corrected, with new procedures put in place to keep it from happening again.
What kinds of tax types were involved?
All of the refunds were for state individual income tax.
What should taxpayers do if they received a duplicate refund?
Do not spend it.
Do not attempt to reimburse the state.
The state is working with financial institutions to recover the duplicate refunds directly from the recipients’ bank accounts. This process is already underway and does not require any action on the part of the taxpayer.
If an attempt to recover the funds electronically fails, the Louisiana Department of Revenue will contact the taxpayer by mail with repayment instructions.
Taxpayers should not instruct their banks to reject the duplicate refund. The state is in direct communication with the financial institutions.
To determine if they received a duplicate refund, taxpayers should review the entire week’s account transactions from Monday, March 11 through Friday, March 15. If they review only one or two days of transactions, they might not notice the original refund deposit, which was not reclaimed by the state.
What if a taxpayer has already spent the duplicate refund?
If the state fails to recover the funds electronically, the Department of Revenue will send the taxpayer a letter with repayment instructions. The taxpayer will have 30 days from the date of the letter to return the money.
If after 30 days the funds have not been returned, the Department of Revenue will issue a bill, at which point the normal collection process will begin, including the application of penalties and the accrual of interest on the amount due.
What if a taxpayer has already returned the overpaid amount and the duplicate refund is also electronically recovered by the state?
Contact the Department of Revenue by email at DuplicateRefund@la.gov with the following information:
- Contact phone number
- Refund amount
- Tax year of refund
- Name and routing number of financial institution
- Last four digits of Social Security number
Once the department has verified that a refund is due, a new one will be issued.