Georgia's tax department is forced to pay more than $2 million in interest to some 278,000 taxpayers whose refunds were not issued within 90 days of the April 15 filing deadline.
Department of Revenue officials say say the backlog occurred from delays in processing income tax returns.
They say they were forced to cut 300 jobs after lawmakers slashed $12 million from the agency in the last year.
Georgia law requires the state to pay interest at 1 percent per month after the 90-day limit.
Taxpayers receiving interest payments will get an average of $7.42, although more than 90,000 are receiving $1 or less.