Updated for tax season 2019*
Are you among the many Americans who file your taxes early so you can get your refund sooner? If you claim the Earned Income Tax Credit (EITC) or Child Tax Credit (ACTC) and expect to receive a refund, you’ll have to wait until after mid-February to get it.
The Protecting Americans from Tax Hikes Act of 2015 (PATH Act) says the Internal Revenue Service (IRS) cannot issue credits or refunds for an over-payment before Feb. 15, 2018 for any filer who claims the EITC or ACTC.
If you don’t claim the EITC or the ACTC, the IRS says your refund will likely be processed in the typical time frame of 21 days.
Refunds delayed may mean less fraudulent returns
While news of a delayed refund may not be music to your ears, the reasoning behind it is good. This change gives the IRS more time to review income tax returns and prevent fraudulent returns from being processed.
Too often, fraudsters file bogus returns before the actual filer can complete their taxes and claim credits like the EITC and ACTC.
Both the EITC and ACTC are refundable tax credits, which are particularly advantageous because they are beneficial even after reducing your tax liability below zero.
If the amount of these credits is more than the amount of taxes due, the difference will be given back as a tax refund.
Savvy criminals know that – and input numbers to make it look like they should get more money back.
Will you be affected?
If you file early and claim either of the credits noted, you may be affected.
If you’re not sure, start by determining whether you qualify for the EITC. You may be eligible to claim the credit if the following is true:
- You have earned income
- You, your spouse (if you’re married) and any qualifying children have a Social Security Number (SSN)
- Your filing status is married filing jointly, head of household, qualifying widow(er) or single
- You are a U.S. citizen or resident alien all year, a nonresident alien married to a U.S. citizen or a resident alien and filing a joint return
- No one else can claim you as a qualifying child for the EITC
- You do not have foreign earned income
- Any income earned from interest, dividends or other investments is less than $3,600
If you do not have a qualifying child, you must:
- Be between the ages of 25 and 65 at the end of the year
- Have spent at least half of the year living in the United States
- Not be the qualifying child of another person
The ACTC is based in part on the Child Tax Credit (CTC). A nonrefundable tax credit, the CTC allows you to claim a credit worth up to $2,000 per qualifying child. If you owe less income tax than the amount of the CTC amount, you may be able to claim the ACTC which is refundable up to $1,400.
You can take the ACTC, a refundable credit, even if you owe little or no income tax. To qualify, you need to have earned more than $2,500 in income. Click here to learn more about the ACTC.
TaxAct can help you determine if you’re eligible for both of these credits. Simply input your information into the product, and it will calculate the credit for you.
Three tips to get your refund faster
File early.It’s a good idea to file your return as early as you can. Fighting the urge to procrastinate will land you closer to the front of the line when the IRS starts processing returns. And that means you’ll get your refund faster if you’re due to receive one. Plus, filing early reduces the chances that a criminal will use your personal information to file a phony return. Remember, if someone gets access to your SSN, they can file a return in your name. Safeguard your SSN and file your taxes early.
E-file your return.Mailing a paper return can take several weeks longer to process than filing electronically. Filing your taxes online is faster than penciling numbers onto paper forms, and the IRS will process your return – and refund – quicker.
Choose direct deposit.If you’re due a refund, you’ll get it sooner if you choose the direct deposit option rather than waiting for a check. In addition, the process is super easy – you just wait for your refund to show up in your bank account!