Expect Tax Refund Delays in your 2016 Tax Return Season

A new law takes effect in 2017 which will mean tax refund delays for some tax payers.

Reason for the Tax Refund Delays

In 2015 Congress passed a law, the PATH Act, which is aimed to Protect Americans from Tax Hikes. Within that law is a new requirement to ensure the program’s integrity. Due to the increased level of tax fraud that has been so prevalent in recent years the new provisions are aimed at protecting Americans.

Who is affected by the new Tax Refund Delays?

• Anyone filing Earned Income Tax Credit
• Anyone filing Additional Child Tax Credit

I’m sure you are asking, how is the delay affecting your refund? The new stipulations means that the IRS cannot issue refunds to anyone claiming the above credits until at least February 15th.  The goal of this new provision is to allow the IRS more time to process returns with these credits in an effort to prevent fraud. It offers them the ability to be more precise in verifying the validity of the return.

What Should You Do If you Will be Affected by the Tax Refund Delay?

• You don’t need to do anything differently than you’ve done in the past.
• Don’t wait to file your return until after 2/15, doing so will just push your return further down the queue.
• Be patient. While those credited refunds will begin being returned on Feb. 15th that doesn’t mean you will receive your refund on that date. The returns will be processed in queue.

The IRS will begin accepting and processing tax returns as soon as the filing season begins. This delay only affects those returns utilizing the above mentioned credits. Tax payers should continue to submit their returns as they normally do with the understanding that some filers won’t receive their refunds until after Feb. 15th. Most taxpayers will not be affected by this and should receive their refunds within a normal timeframe, generally about 21 days or less.

Once, your return is accepted by the IRS, you can always use the Where’s My Refund? tool on IRS.gov and the IRS2Go phone app to follow your return and stay up-to-date on what is happening with your return.

As always, Cowdery Tax is here to help with your return. Give us a call to schedule your appointment: 740•374•6942

This information is not intended as legal or tax advice. Cowdery Tax and its representatives does not offer legal or tax advice. We offer services for business bookkeeping, payroll, tax payments, and personal tax filings. We share information that is publicly available. Tax laws may change with or without notice that may alter or change the information contained in this publication.