Confused About IRS Refund Processing Delays?

February 7, 2017

I’ve been hearing from many of my clients and reading about public concern regarding the delay in 2017 for the 2016 refund processing. It seems there is quite a significant amount of confusion and misinformation floating around out there in cyberspace. I can totally understand why this delay is causing stress and anxiety for some taxpayers. Many count on that annual tax refund for major purchases or other expenses they might have. Let’s set the record straight.

Will the IRS be Holding & Delaying Some Tax Refunds?

Yes, the IRS is holding refunds for some taxpayers. Beginning in 2017, a new law (Protecting Americans from Tax Hikes (PATH) Act) approved by Congress requires the IRS to hold refunds on tax returns claiming the Earned Income Tax Credit (EITC) or the Additional Child Tax Credit (ACTC) until mid-February. The IRS must hold the entire refund — even the portion not associated with the EITC and ACTC — until at least February 15th.  This means that the IRS will not begin processing the refunds until February 16th.

Which Tax Refunds Will be Held?

Only those tax returns that are claiming EITC or the ACTC are required to be held, which will delay the processing of the refund until after February 15th.

Why is the IRS Delaying Tax Refunds?

This change helps ensure that taxpayers get the refund they are owed by giving the agency more time to help detect and prevent fraud. The IRS has been focused on creating stronger security filters and is stepping up its efforts to combat identity theft and tax refund fraud through its many processing filters. This process sometimes causes delays during the review process in some legitimate refund returns.

When Can I Expect to Receive My Refund?

While the IRS will begin to issue EITC/ACTC refunds starting after February 15th, you should not count on actually seeing your refund until the week of February 27th — if you chose direct deposit or a debit card and there are no processing issues with your tax return.

Where Can I Find More Information?

IRS Articles & News Releases
IRS YouTube Videos

 

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