Posts in category: ABLE Exclusive

Article Highlights: 

• Probable Reason
• Quick Checklist — What to Do Right Away
• Why Your Refund May Be Delayed
• What CP53E is and How it Causes a Delay
• Common Errors and Special Situations
• What You Should Do Now — Step-by-Step
• If a CP53E Was Sent in Error
• When to Get More Help

If your federal tax refund is seriously overdue, it’s normal to feel worried — especially if you were counting on that money for bills or other expenses. Before panic sets in, here’s a clear, practical guide explaining what may be happening, why a new IRS administrative change could be the culprit, and exactly what steps you should take now.

Quick Checklist — What to Do Right Away:

• Check the IRS “Where’s My Refund?” tool at www.irs.gov and your IRS Online Account for status updates. 
• Look through your mail carefully for an IRS notice called CP53E. If you find it, read it right away. 
• Confirm the bank routing and account numbers you submitted with your return (if any). One incorrect digit can stop a direct deposit. 
• If you don’t have an IRS Online Account, consider creating one so you can see notices and respond if needed. 

Why Your Refund May Be Delayed: The IRS has begun an administrative shift to make electronic (direct-deposit) payments the default method for federal refunds. As part of that change the agency will pause some refunds when a return does not include usable bank account details, or the bank information is rejected. In those situations, the IRS mails a new notice, CP53E, and gives taxpayers a short window to supply or correct bank information online. That additional step can create a long, unexpected delay.

What CP53E is and How it Causes a Delay:

• CP53E is a mailed notice telling you the IRS could not immediately deposit your refund because the return lacked usable bank details, or the bank information was rejected. 
• You have 30 days from the notice date to add or update bank account information using your IRS Online Account. The IRS permits only one such online update. 
• If you don’t respond within 30 days (or if the bank details you enter are incorrect and the deposit is rejected), the IRS will ultimately issue a paper check — but not immediately. The IRS’s internal processing to move from the CP53E path to issuing a paper check can add weeks. The IRS has indicated this additional paper-check processing can take roughly six more weeks after the 30-day window closes.
• Those stages — the original processing, the 30-day CP53E response window, and then up to roughly six weeks for a paper check — together can push a refund delay toward three months or more.
  
  

Common Errors and Special Situations:

• The IRS has sometimes mailed CP53E in error. For example, to taxpayers who elected to apply an overpayment to 2026’s estimated tax. If you find a CP53E and you did not expect a refund, review the return details and your payment election before acting. 
• If you entered bank information that had a single wrong digit in the routing or account number, the deposit will fail, and the case moves to the paper-check pathway.
  
  

What You Should Do Now — Step-by-Step:

1. Consult the IRS status tools first:
   • Use “Where’s My Refund?” and your IRS Online Account for the clearest status. If a CP53E was mailed, it may appear in your online notices as well.
2. If you receive a CP53E, respond immediately (and accurately).
   • Only the taxpayer can update bank information through the IRS Online Account login; IRS phone or in-person staff will not accept routing/account numbers. 
   • The system allows only one online update, so double-check routing and account numbers before submitting a change. 
   • If you need help, contact this office for assistance. But remember, a taxpayer must enter the banking information themself.
3. If you don’t find a CP53E or it’s already beyond the 30-day response time, prepare to wait for a paper check, and consider a trace if it never arrives.
   • If the IRS indicates a paper check is being issued but you don’t receive it after several weeks, this office can assist you with next steps, including filing a Form 3911 (Taxpayer Statement Regarding Refund) to start a refund trace when a refund check is lost, stolen, or not received.
4. Protect yourself and your information
   • Do not ever give your bank routing and account numbers to IRS phone agents; the IRS requires the taxpayer to enter that info in their secure online account. Beware of phishing scams that mimic IRS notices.
5. Ask about interest — the IRS may owe you some
   • If the refund is delayed beyond statutory timeframes, the IRS may owe interest on the delayed refund. Ask your preparer to check whether your situation meets the requirements for interest under tax rules. By the way, if the IRS does pay you interest, look for a Form 1099-INT from the service next January; the interest will be taxable on the return for the year you receive the interest.
     
     

If a CP53E Was Sent in Error:

• Don’t ignore it until you confirm the facts. Some taxpayers who had elected to apply overpayments to 2026 have received a CP53E incorrectly. If the notice truly was sent in error, you may not need to take any action.   
  
  

When to Get More Help:

• If you’ve followed all the steps (checked online tools, responded accurately to the CP53E if applicable, and waited the required time for a paper check) and still have not received your refund, contact this office or use IRS contact channels to start a trace. This office can help you complete Form 3911 if needed.
  
  

Final thoughts: A late refund is stressful, but new administrative procedures at the IRS — especially the move to default to electronic payments and the CP53E notice with its 30-day correction window — help explain why some refunds are taking much longer than expected. If in doubt, contact this office for help reviewing what was submitted and for assistance in starting a refund trace if needed.

You log into the portal together.

There’s a pause before clicking. Then the decision appears on the screen.

They got in.

It’s everything you hoped for them. The work paid off. The opportunity is real.

And then, almost immediately, your role shifts.

Because now this isn’t just their decision.

It’s yours.

This Is Where the Decision Becomes Financial

Your child is choosing where they want to go.

You are deciding what that choice means for your family financially.

Every acceptance now comes with a number attached to it. Not just for this year, but for the next four. Tuition, housing, fees, and everything that follows.

If there are multiple schools on the table, this becomes less about which one they prefer and more about which one makes sense.

Start With the Number That Actually Matters

The published tuition is not your decision point.

What matters is the net cost to your family, after scholarships, grants, and financial aid are applied.

Two schools that look very different on paper can end up costing nearly the same. In some cases, the higher-priced school may actually result in a lower out-of-pocket cost.

Before making any decision, it is worth comparing each option based on the total cost over four years.

That number drives everything else.

How Families Are Actually Paying for College

Most families are not using a single strategy. They are layering multiple sources together.

The key is understanding how those pieces interact.

529 plans are often the starting point. When used for qualified education expenses, withdrawals are generally tax-advantaged. But how those funds are used matters. Coordinating distributions over time and alongside other tax benefits can significantly improve the outcome.

For families who have overfunded a 529 plan, there is now additional flexibility. Under current rules, unused funds may be eligible for a tax-free rollover into a Roth IRA for the student, up to certain limits. This has reduced the risk of “over-saving” and made 529 plans more versatile than they were in the past.

Beyond savings, many families rely on a combination of current income and school payment plans to spread costs throughout the year. This can reduce borrowing, but it requires careful planning around cash flow.

Borrowing is still part of the equation for many households, but it is becoming more structured. Federal Parent PLUS loans remain an option, but recent changes are tightening how much families can rely on them over time. This makes it more important to think beyond the first year and map out a full four-year funding plan.

Some families also consider using home equity through a line of credit. In certain situations, this can offer lower interest rates. However, it also introduces additional risk by tying education costs to your home, which makes it a decision that should be evaluated carefully.

A Strategy Many Families Are Just Starting to Use: Grandparent Support

This is one of the most powerful planning opportunities right now.

Grandparents who want to help can do so in ways that are both meaningful and tax-efficient.

They may choose to pay tuition directly to the school or contribute through a 529 plan. Under recent financial aid rule changes, distributions from grandparent-owned 529 plans generally no longer reduce a student’s financial aid eligibility in the way they once did.

That shift has opened the door for more coordinated family planning.

When structured correctly, this can reduce the burden on parents while also creating estate planning benefits for grandparents.

Where Tax Strategy Quietly Impacts the Outcome

This is where many families miss opportunities.

Paying for college is not just about funding. It is about coordination.

Parents may be eligible for education tax benefits such as the American Opportunity Tax Credit. To receive the full benefit, families generally need at least $4,000 of qualified expenses paid out of pocket, rather than from 529 funds.

This creates a planning decision.

If 529 funds are used for all expenses, families may miss out on valuable tax credits. Coordinating how expenses are allocated between savings and out-of-pocket payments can improve the overall result.

Income levels can also affect eligibility for these benefits, which makes timing and structure even more important.

This Is Not Just a College Decision

It is one of the largest financial decisions many families make.

The goal is not simply to say yes to the right school.

It is to say yes to a plan that supports your child’s future without creating unnecessary financial pressure on yours.

That balance looks different for every family.

Before You Make the Final Decision

This is one of those moments where slowing down pays off.

There are multiple ways to structure how college is funded. Small decisions around timing, coordination, and funding sources can have a lasting impact.

Before committing to a specific school, it is worth stepping back and looking at the full picture over all four years.

If you would like help comparing options, coordinating tax strategies, or building a plan that aligns with your broader financial goals, our team is here to guide you through that process.