Beginning this year, a new law approved by Congress in 2015 (the PATH Act) requires the IRS to hold refunds on tax returns claiming the Earned Income Tax Credit (EITC) or the Additional Child Tax Credit (ACTC) until February 15. The IRS estimates that taxpayers may not start receiving refunds until the week of February 27.
We expect this to cause an inconvenience or hardship for many low- and moderate-income individuals and families who rely on their tax refunds to meet basic needs. Additionally, paid preparers like H&R Block and Liberty Tax have shared that they will offer products promising taxpayers a portion of their refund before February 15 through advanced refund loans, which could be costly.
What do taxpayers need to know?
- Federal tax refunds will take longer this year for taxpayers receiving the Earned Income Tax Credit (EITC) and/or Additional Child Tax Credit (ACTC). The IRS will begin processing returns with these credits starting February 15.
- The IRS cautions taxpayers that due to processing times these refunds likely won’t appear in bank accounts until the week of February 27.
- This is an extra measure to prevent against fraud and identity theft.
- No one can speed up your federal refund so don’t pay someone who promises they will.
- You should still file your taxes as planned.
Resources and referrals
Where’s My Refund? Within 24 hours after the IRS has received someone’s e-filed tax return, taxpayers can go online to check the status of their refund.
Tips for Managing the Delay The Consumer Financial Protection Bureau (CFPB) has some great tips for taxpayers to help taxpayers deal with the delay.
Free Tax Preparation Sites Free tax preparation sites in your community know about this change and are ready to help taxpayers get their maximum refund and answer questions about the delay.