So I called the tax department and of course, they basically stated that everyone's taxes are being "reviewed" due to the inflation check problem.
NYS did not inform tax preparers that the inflation check refund is not to be added to the AGI. It is not income. It's a refund based on your taxes (basically an extra amount of money that NYS gave us, saying it was an overpayment, but it was funded through the state budget using surplus revenue generated from higher-than-expected sales tax collections.) They overcharged NYS residents and actually gave the residents back money from the excess sales tax revenue.
If you filed your taxes in 2023, you got the inflation check.
Even if you DIDN'T add it, everyone's taxes are under review because they need to make sure your AGI and all of your deductions, credits etc are correct and that it doesn't throw off your refund, where you could end up paying or receiving too much and then having to pay it back.
I had 1 W2. No deductions. Standard deduction. No children. Nothing to add. I tried to enter the inflation check (I used FreeTaxUSA, but it kept zeroing it out, so I didn't add it).
I filed on 1/26/26. Federal accepted in about 5 hours. I received notice that my refund would be deposited by 2/16. On 1/31, my federal was deposited.
(I also know others have had more complicated andd they are still waiting and/or have received it, were all in a queue so you have to wait)
NYS didn't accept until 2/3, and has been in the "under review" status since then.
So tldr…NYS screwed up with inflation checks to not be added to income (because it's not actual income, it's a refund for NYS collecting too much tax revenue), tax software didn't reflect this, refunds are now being checked as they are updating the section where it asks if you received it and the amount. If it's been denied, resubmit without the amount and it'll be accepted. Most software is correcting it for you or you amend it manually and resubmit.
We just have to wait.
Info about NYS taxes "under review" and not being processed
byu/PeachBaskettt intax
Posted by PeachBaskettt