Refund Delays

Yellow post-it note with “FILE TAX RETURN!” written in marker placed on a calendar in between the 14th and 17th days.

Some tax refunds that include an Earned Income Tax Credit (EITC) or Additional Child Tax Credit (ACTC) will be held until February 15.

WHAT DO YOU NEED TO KNOW ABOUT REFUND DELAYS?

  • File your taxes as you normally do. You do not need to change the way you file your tax return or where you get your taxes done.
  • The delay applies to all methods of tax filing – at a VITA site, by a paid tax preparer, or self-preparation. No one can send you your refund before February 15. There are no exceptions.
  • The purpose of the refund delay is to help protect you and your refund.
  • Beware of offers of loans against delayed refunds, such as a loan on a refund claim based on a  instead of a W-2. Loan fees are expensive, and the amount may be incorrect without all income information – but the loan must still be repaid.
  • While the delay applies specifically to tax filers claiming the EITC and ACTC, it will affect your entire refund. This includes refunds based on over-withholding or other tax credits. You cannot receive a partial refund.
  • Not everyone is affected by the delay. Tax filers claiming the EITC and ACTC who file returns after February 15 will not be affected by the delay. Additionally, early filers who are ineligible to claim the EITC or ACTC will not be affected. Refunds based only on over-withholding or other tax credits will not be held.

WHY IS THE DELAY HAPPENING?

On December 18, 2015, Congress passed the PATH (Protecting Americans from Tax Hikes) Act. This act made over 20 tax changes permanent, including tax credit expansions to the EITC, ACTC, and American Opportunity Tax Credit (AOTC). The PATH Act also changed how the IRS issues EITC and ACTC refunds.

The IRS will not send your tax refund before February 15 if you claim the Earned Income Tax Credit (EITC) or Additional Child Tax Credit (ACTC) on your tax return. This will allow the IRS time to check the income you on your tax return with your employer’s records, since employers must now file W-2 forms and 1099s by January 31 (previously, they had until March).

Most refunds are expected to be issued within 21 days of processing. If the IRS finds major differences between the income information provided on your return and that provided by your employer(s), there may be delays as the IRS tries to sort out the mismatch.

HOW YOU CAN PREPARE FOR POTENTIAL REFUND DELAYS?

Before Tax Season

  • Gather your tax filing documents so that everything is in one place to file your taxes.
  • Plan how you will file your taxes. If you will visit a Volunteer Income Tax Assistance (VITA) site, check if you need an appointment, and make one, if so.

During Tax Season

  • Check on the status of your tax refund through the IRS Where’s My Refund? tool.
  • If you have urgent financial needs, look for a credit union that offers safe, short-term loans.
  • Consider learning more about budgeting through a financial coach, counselor, or class. Explore services that can help you in “planning ahead” for future delays.

RESOURCES

 

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