Reason 1 : Using 2019 income figures to calculate 2020 Earned Income Credit and Child Tax Credit
Unfortunately many tax refunds are being delayed because of certain types of tax credits called the Child Tax Credit and the Earned Income Tax Credit. The reason for this is that there was a provision in the December spending bill that said, you can use either your 2019 income or 2020 income to calculate these tax credits. Unfortunately the IRS is now saying if you use your 2019 income to get these tax credits on your 2020 tax return, IRS has to manually check to verify that that income is correct.
Reason 2 : Discrepancy between IRS stimulus payment records and what was reported on the tax return.
Taxpayers were required to report how much in stimulus payments (economic impact payments) that were received for the first and second round payments. If the amount reported on the tax return does not match IRS records, then unfortunately the tax return gets kicked out to manual processing.
From our experience it seems the manual processing for discrepancies in stimulus payments reported is taking a shorter time to process, which is adding a few extra weeks to the normal refund time frame of 10-21 days from e-filing. However if your return is one being held up due to a child tax credit or earned income tax credit, IRS reps are reporting a 10 week processing period from the date of e-file.
Click here for an article that does a good job at explaining these delays