Do you rush to get your tax return done early? Did you know that some IRS refunds will be later than usual this year? If you get the Earned Income Tax Credit (EITC) or the Additional Child Tax Credit (ACTC) you may have to wait longer than usual to get your return.
I have a few friends that every year rush to file their taxes in the middle of January, banking on getting their return in time to pay their February rent. But starting this year certain refunds will not be released until Feb. 15th.
What’s the reason for the change? It’s actually to help prevent fraud. In the past few years there has been a sharp increase in tax fraud, especially in cases with the EITC and ACTC since those refunds can be a sizeable amount. Someone files using another person’s name in January or February and gets several thousand dollars back. Then the actual individual files their taxes (not knowing anything about the fraud) and they are surprised when they get a notification from the IRS saying their taxes were already filed and their refund check was cashed.
So, here’s the details:
In general, the IRS sends refunds within 21 days. Starting this year they are mandated to hold all refunds with either Earned Income or Additional Child Tax Credits. Here’s the other important part, February 15th is when they can START to release these refunds. “However, the IRS cautions taxpayers that these refunds likely won’t arrive in bank accounts or on debit cards until the week of February 27 (assuming there are no processing issues with the tax return and the taxpayer chose direct deposit).” See the IRS website for more information.
If you’re not an early filer, or aren’t counting on your refund showing up before the end of February, this shouldn’t impact you at all. In fact if you always wait until the last day, you actually get some extra time. Tax day is extended to April 18th, 2017 because of a holiday in Washington DC.