There’s no better time of the year than knowing your tax refund is waiting for you just around the corner. You’re eagerly awaiting notifications via e-mail for important tax documents and check the mail regularly for any other documents including your W2. Once you have everything you don’t want to waste another minute. You fire up your laptop to file electronically or race over to your accountant to get your taxes completed and filed. After all, who wants to wait around when money is owed to you?
Unfortunately the IRS has other plans that could possibly delay your tax return. Those delays, according to the Associated Press, will affect as many as 40 million Americans (Ohlemacher) who are just like you and I, claiming common deductions and credits that the government rightfully allows us to claim. Here’s what you should know right now.
The Earned Income Credit (EIC) or Child Tax Credit will Delay Your Refund
You read that right. For those that claim either the Earned Income Credit or the Additional Child Tax Credit (ACTC) be ready to sit around waiting for your refund just a little bit longer. The IRS has passed a new law the Protecting Americans from Tax Hikes (PATH) Act requiring the IRS to delay tax refunds until February 15th. With that being said, IRS Commissioner John Koskinen anticipates the processing time will delay most refunds until the end of February (Ohlemacher).
This delay will impact and ultimately hurt lower income families who depend on their tax refund for many of their diverse financial needs. To somewhat burden the blow, H&R Block will provide interest-free loans to families impacted (Steig).
The IRS is Delaying Your Tax Refund Because of Something that’s not Your Fault
As stated on the IRS website, the PATH Act mandates the IRS to hold refunds on tax returns claiming the EITC or the Additional Child Tax Credit until mid-February. This change will help to ensure that taxpayers get the refund they are owed by giving the IRS more time to help detect and prevent tax fraud (IRS).
Fraud, to say the least, has been on the rise in the last several years. From 2013 and 2014, the IRS estimated that it has issued $5.8 billion and $3.1 billion respectively in fraudulent tax refunds to identity thieves in those years (Ohlemacher). The earned income credit has been plagued by many discrepancies ranging from underpayments all the way up to fraud rousing climate changes on how the IRS governs its policies and protects Americans from identity theft.
Is there for Me to Get Around these Delays?
Unfortunately there isn’t a whole lot you can do to persuade the IRS to hand over your tax refund if you claim to be a good faith taxpayer. You can, however, inquiry with H&R Block about their Refund Advance program or Jackson Hewitt’s Express Refund Advance program to see if you qualify for an advance on your tax refund. You’ll have to book an appointment with their tax preparers so the sooner you reach out the sooner they can determine your options.
Another option you could perhaps take into consideration is changing your withholding status going forward. If you’re claiming too much per paycheck the IRS is essentially taking more taxes out of your paycheck per week thus, by the end of the year, the government owes you money like you’ve been accustomed to. By switching your withholding status it will allow you to take back more per paycheck while still paying your fair share of taxes. Reach out to your boss or even your accountant to learn more.