Skip to content
Search AI Powered

Latest Stories

The IRS is Delaying Tax Refunds for Millions of Low-Income Families

The IRS is Delaying Tax Refunds for Millions of Low-Income Families

The IRS is delaying tax refunds for low-income families who claim the EITC and ACTC tax credits. The delay will extend until February 15, though refunds are unlikely to hit bank accounts until the week of February 27.


January 23 begins the tax filing season, but for many, 2017 may prove a little slower than previous tax filing cycles.

To combat identity theft and fraud, the Internal Revenue Service (IRS) is delaying tax refunds for over 40 million low-income families this year. These delays are expected to affect families claiming the earned income tax credit and the child tax credit.

Though the IRS intends to issue more than nine out of ten refunds in under 21 days, a new law — the Protecting Americans from Tax Hikes Act, or PATH — requires the IRS to delay refunds to anyone claiming the aforementioned benefits until February 15. Of course, processing times will delay most of the refunds until the end of February.

The purpose of the delay is to provide the IRS additional time to screen tax returns for fraud, which occurs more often than the public may expect. In 2014, the IRS estimates that it issued $3.1 billion in fraudulent tax refunds to identity thieves. In 2013, the estimate was about $5.8 billion in fraudulent tax refunds. The agency successfully stopped at least $47 billion in fraudulent refunds in the combined two years.

This delay affects low-income and working-class families because the earned income tax credit (EITC), though one of the federal government’s largest anti-poverty programs, is prone to billions of dollars in erroneous payments every year. Overpayments, underpayments and fraud are three of the most common public errors, and criminals have become adept at manipulating the system. According to the U.S. Treasury Department, approximately $17.7 billion in EITC payments were issued improperly in 2014.

Another program that enables increased fraudulent behavior is the additional child tax credit (ACTC), which also aids low-income families. Families with children are generally eligible for a $1,000 tax credit per child; an increased tax credit also benefits low-income families who cannot claim the full credit, as they do not owe enough in federal income tax. Over 20 million families claimed $27 billion in ACTC in 2014.

IRSCredit: Source.

Middle-class or top-earning families are unlikely to experience delays, as they are typically ineligible to claim EITC or ACTC status.

In 2017, the IRS plans to process over 153 million tax returns — over 70 percent of which will end in taxpayer refunds. Vigilance in controlling identity theft, which is currently a multi-billion dollar industry, is arguably more necessary than ever.

Fortunately, the efforts seem successful. Last year, 275,000 U.S. taxpayers reported stolen identities to the IRS — a 50 percent drop from 2015.

The downfall is that the protective measures delay legitimate refunds, to the tune of 1.2 million returns — or about $9 billion — as of last year, according to the National Taxpayer Advocate.

February 15 marks the release date for EITC and ACTC tax refunds, but the IRS warns that taxpayers will likely not see returns in their bank accounts until the week of February 27. Interest-free loans are available to taxpayers in the interim between filing and receiving tax refunds.

Luckily, there are steps one can take to avoid a refund delay.

  • The IRS encourages taxpayers to double-check information entered into tax-filing software; simple oversights and errors are an easy path to refund deferral or stall.
  • Be certain to file a complete tax return, and beware computation errors, which are easily avoidable using popular tax preparation software or with the assistance of a tax preparation specialist.
  • If necessary, renew your Individual Taxpayer Identification Number (ITIN) — any ITIN that was unused in the past three years expired on January 1, 2017, thanks to Notice 2016-48 of the PATH Act.
  • File on time, and enter direct deposit or bank information correctly to avoid any additional delays.

More from News

Screenshots of Kamala Harris and J.D. Vance

Kamala Harris Calls Out JD Vance For 'What He Didn't Say' During RNC Speech In Epic Takedown

In a fiery speech to supporters in North Carolina, Vice President Kamala Harris called out what J.D. Vance—former President Donald Trump's freshly selected running mate—"didn't say" in his speech accepting the VP nomination on Night 3 of the Republican National Convention.

Amid much talk about key conservative issues like immigration, the ongoing border crisis, and "law and order," he did not once mention what the GOP has explicitly laid out and is now attempting to distance itself from: Project 2025.

Keep ReadingShow less
Screenshot of Daniel Dale; Donald Trump
CNN; Chip Somodevilla/Getty Images

CNN Fact-Checker Debunks Trump's RNC Speech Lies For 2 Minutes Straight—And Yeah, It's A Lot

CNN fact-checker Daniel Dale debunked lies former President Donald Trump told during his acceptance speech at the Republican National Convention, dedicating two minutes to picking apart Trump's many falsehoods.

Trump made numerous oddball remarks during his speech, particularly his reference that the world was "at peace" when he was in office until his political opponents "turned it into a planet of war," declaring that the planet is now "blowing up around us" due to Democratic policies.

Keep ReadingShow less
Screenshots of Donald Trump and Tiffany Trump

Trump Snubbed Daughter Tiffany As She Went In For A Kiss At The RNC—And People Are Team Tiffany

Social media users were sympathetic to Tiffany Trump after her father, former President Donald Trump, appeared to snub her as she went in for a kiss before his climactic speech accepting the GOP's presidential nomination.

Footage from early in the evening shows a smiling Tiffany walking up the stairs toward Trump, who clearly saw her. She then attempted to greet him with a kiss only to be ignored, as he looked out at the crowd beyond her, as she walked away looking dejected.

Keep ReadingShow less
Picture of Marjorie Taylor Greene seen on "The Daily Show" with Jon Stewart
The Daily Show

Jon Stewart Just Pointed Out The Weird Noise MTG Made During Her RNC Speech—And Now We Can't Unhear It

Jon Stewart had a lot to unpack on Tuesday's airing of The Daily Show, given a wild week that included the shocking assassination attempt on former Republican President Donald Trump as well as the Republican National Convention in Milwaukee, which kicked off on Monday.

One specific highlight from the opening night of the RNC that Jon couldn't help but fixate on was far-right Georgia Representative Marjorie Taylor Greene making strange sounds while addressing delegates during her speech.

Keep ReadingShow less
Justin Long and wife Kate Bosworth
Slaven Vlasic/Getty Images for Smile Train

Justin Long Shares Wife Kate Bosworth's 'Really Romantic' Reaction To Him Pooping The Bed

Warning: soiler alert. Graphic bowel movement descriptions ahead.

Actor Justin Long had a romantic e-poo-phany about how much he loved his wife, actor Kate Bosworth, when he soiled the bed after suffering from food poisoning during a trip to Mexico.

Keep ReadingShow less