Most people already know about tax refund delays when you claim the Earned Income Tax Credit or Additional Child Tax Credit. This isn’t because the IRS just feels like holding your money for fun. The IRS introduced us to this back at the end of 2015 but some are just finding out about it now. Let it be known– if you claimed the Earned Income Tax Credit (EITC) or Additional Child Tax Credit (ACTC) on your tax return it will be delayed if you are an early filer. So if ya don’t know, now ya know!
We wrote more about how to know if you are subject to the Path Act.
The IRS is not the Villain who planned a tax refund delay
Even if you file your return and it gets accepted early, refunds with the EITC or ACTC won’t be released until after February 15th according to the IRS. A new law took effect in 2017 that requires these types of refunds to be held. What!!!? This is one reason why you could see a tax refund delay. We wrote about the new law here in our PATH Act post where you can read more about the actual law itself. The IRS isn’t being a bully by holding on to our refunds. They are just the agency that carries out what the PATH Act law requires.
Don’t let yourself get into a pickle. Plan ahead. It may seem like a punishment, but the IRS has been trying to stop ID theft and fraud. The law is intended to delay refunds to ensure they get into the proper hands, avoid identity theft, and defend from people who fraudulently claim these credits. The IRS believes many of these illegal returns tend to be filed early in the tax season. The IRS was skewered by the U.S. Treasury Inspector General over these matters. If you want to read more about these recommendations (butt chewings) and see the mechanics of the law, head over there to that PATH Act post.
Will the tax refunds be deposited on February 15th?
No. Although you very well could see tax refunds deposited the day after in certain cases. Check out our refund cycle chart to see when we think you will receive a tax refund with Path credits. We don’t know exactly when all the deposits will be sent, but we have seen them be deposited as early as February 16th when you meet all these circumstances: 1) paid fees upfront rather than having them deducted from your refund. 2) Did not take a refund advance and 3) Use a No Hold Bank.
Behind the scenes, the Path Act freeze is lifted on the 15th, and transcripts update the next day for a deposit a few days after.
It remains to be seen every year, but we look at past years. The IRS says don’t count on it until the end of February. We expect those with prepaid debit cards and similar types of banks who post deposits earlier than some banks to see deposits first. But as the story always goes, it’s all speculation until the IRS refund machine starts pumping out deposits.
Let’s be real, there is always some sort of glitch.
We are not sure what is store for us this tax season, there always seems to be some sort of glitch every year. It’s easy to wonder if the new procedures will cause even more of a delay. I can’t imagine a January or February without tax refund mania. We have come to expect the three ring circus and accept the daily nuttiness from our early filers (myself included). Count on the tax refund grapevine at igotmyrefund.com to help. If you need more information please post a question and we will try our best to get you an answer. Also, search our site we have tons of information on many different topics.
Check out other reasons tax refunds could be delayed. Resequenced or Unpostable Return
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