As planned, New York state will mail out $500 million of delayed tax refund checks on April 1.
The state temporarily stopped issuing refund checks in mid-March, stashing money to help pay $14 billion of bills due this month.
In all, 651,851 taxpayers had their refund checks held back, preventing the state from having to spend $500 million.
On Thursday, the state will mail checks for all those taxpayers, who will receive an average refund of $766. Thursday is the start of the state's new fiscal year.
"After that, we will try to process tax refund checks as quickly as possible," said Matt Anderson, spokesman for the state Division of the Budget. A refund is typically paid within three to four weeks from when the state receives a tax return.
By April 14, the state expects to have paid 1.9 million tax refunds, totaling $1.4 billion.
The temporary hold on tax refund checks impacted people who filed returns dating back to late February.
State law caps the amount of refunds paid from January through March every year at $1.75 billion.
This year, for the first time in a decade, Gov. David Paterson lowered the cap to $1.25 billion to preserve the state's cash flow. The state hit that lower cap on March 12.
The state enacted the cap on refunds in the early 1990s. It had been lowered three times before now, most recently in the 1998-99 fiscal year.