The IRS is advising those that are used to claiming the Earned Income Tax Credit (EITC) and Additional Child Tax Credits (ACTC) to anticipate a delay in their refund.
According to the IRS the delay is the result of, “a recent federal law change aimed at making it easier for the IRS to detect and prevent refund fraud, requires the IRS to hold the refund of any tax return claiming either the EITC or ACTC until Feb. 15. By law, the IRS must hold the entire refund, not just the portion related to these credits.”
While the funds will be released, the IRS cautions affected taxpayers will not see their funds before Feb. 27 regarding there are no issues.
The Potter’s House Ministries of Sciotoville has been an IRS Volunteer Tax Assistance Program (VITA) location for a number of years. Being a VITA site allows officials with the ministries to file federal and state income tax returns for free.
Linda Davis, a VITA volunteer with Potter’s House Ministries said about 65 percent of the 1,300 tax returns they completed in 2016 claimed such credits and can expect a delay.
When asked about the reasoning behind the delay, Davis said, “why they (IRS) said it was going to be delayed is due to identity theft. They are holding it, so they can compare dependents. A lot of times in the past, someone has claimed a child and the person that’s supposed to claim the child, don’t get the credit until later because someone else had already claimed them.”
Davis said there are pros and cons behind the delay.
“It’s good because the people that’s supposed to have it (tax credits), will get it,” Davis said. “The ones that are used to getting it (EITC and ACTC), to get caught up on bills or get tires for their car, will now have to wait for their refund.”
Local mother Stephanie Maynard said she received a letter the other day about the delay and now has to delay getting a replacement car.
Maynard said she uses a tax service that will grant an anticipation loan based on your tax return. Through this service Maynard was able to receive a portion of her return, but not all of it.
When asked what kind of situation not getting her entire return creates for her and her family Maynard said, “I have to get a new vehicle. I’ve had the same car since my twins were two years old and they are now 11 years old. I am trying to make sure I have a way to get to and from work, to make it.”
Davis said, the Potter’s House Ministries will start processing tax returns on January 23. According to the IRS this is also the first day of the nation’s tax season.
“We don’t know how this will work out, but we are nervous about it,” Davis said.
Davis said, with 65 percent of their clients seeking the tax credits, those processing returns will have to explain their taxes can be filed, but their refund will be delayed if seeking EITC or ACTC tax credits.
In years past those, tax filers, seeking EITC or ACTC would see a return in late January or early February.
The IRS advises, “taxpayers to file their returns as they normally do, not wait to file later in the season. Whether or not claiming the EITC or ACTC, the IRS cautions taxpayers not to count on getting a refund by a certain date, especially when making major purchases or paying other financial obligations. The IRS issues more than nine out of 10 refunds in less than 21 days, some returns however, are held for further review.”
Davis said those seeking to have their state and federal tax returns through the Potter’s House must make an appointment.
Potter’s House is anticipating doing at least 1,300 returns again this year or more.
For more information about the new law or delay in funds visit irs.gov
Wayne Allen can be reached at 740-353-3101 ext. 1933 or @WayneallenPDT on Twitter