WEST SPRINGFIELD, Mass. (WWLP) – Millions of Americans may not be getting their federal tax refunds in January. It will be difficult for people that are used to getting these refunds early to pay off those holiday gift bills.
The IRS must hold the tax refunds for millions who claimed the Earned Income Tax Credit or the Additional Child Tax Credit. The change approved by Congress is aimed at battling tax refund fraud and identity theft. Those refunds are now scheduled for February 15th.
“It’s related to the Path Act that was passed in 2015,” Rick LaRose of the accounting firm Pignatare & Sagan told 22News. “Starting in 2017, all the refunds that are related to the Additional Child Tax Credit or the Earned Income Tax Credit are going to be held through mid-February before they are issued. Anybody that relies on the earned income tax credit is not going to get a refund until the middle of February, so it could affect a lot of people.”
26 million tax filers had received the Earned income Tax Credit as of June 2016. More than 20 million had claimed the additional child tax credit in 2014.
The IRS will start accepting and processing 2016 federal tax returns once the filing season starts next month. Tax filers who don’t claim either the EITC or ACTC should get refunds in less than 21 days.