Client Relationships What to Tell Your Clients About Tax Refund Delays Read the Article Open Share Drawer Share this:Click to share on Twitter (Opens in new window)Click to share on Facebook (Opens in new window)Click to share on LinkedIn (Opens in new window) Written by Mike D'Avolio, CPA, JD Published Jan 10, 2017 2 min read In December, the IRS announced tax season will start Monday, Jan. 23, 2017, and will begin accepting electronic tax returns that day. More than 153 million individual tax returns are expected to be filed in 2017. As a result of the sheer volume of returns and several other factors, the IRS reminded taxpayers claiming certain tax credits to expect a longer wait for refunds. The IRS still anticipates issuing more than nine out of 10 refunds in less than 21 days, but there are some important factors that the IRS recommends keeping in mind for taxpayers. Choosing e-file and direct deposit for refunds remains the fastest and safest way to file an accurate income tax return and receive a refund. Beginning in 2017, a new law 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. Under the change required by Congress in the Protecting Americans from Tax Hikes (PATH) Act, the IRS must hold the entire refund, even the portion not associated with the EITC and ACTC, until at least Feb. 15. This change helps ensure that taxpayers get the refund they are owed by giving the IRS more time to help detect and prevent fraud. As in past years, the IRS will begin accepting and processing tax returns once the filing season begins. All taxpayers should file as usual, and tax return preparers should also submit returns as they normally do – including returns claiming EITC and ACTC. The IRS will begin releasing EITC and ACTC refunds starting Feb. 15. However, the IRS cautions taxpayers that these refunds likely won’t arrive in bank accounts, or on debit cards, until the week of Feb. 27, assuming there are no processing issues with the tax return and the taxpayer chose direct deposit. This additional period is due to several factors, including banking and financial systems needing time to process deposits. After refunds leave the IRS, it takes additional time for them to be processed and for financial institutions to accept and deposit the refunds to bank accounts. The IRS reminds taxpayers that many financial institutions do not process payments on weekends or holidays, which can affect when refunds reach taxpayers. For EITC and ACTC filers, the three-day holiday weekend involving President’s Day may affect their refund timing. On Jan. 6, the IRS recommended that tax professionals use the updated Publication 2043, IRS Refund Information Guidelines for the Tax Preparation Community, to advise clients who are expecting refunds. The update includes information detailing why IRS is required to put a hold on refunds claiming the EITC and the ACTC. The agency will begin to release EITC/ACTC refunds starting Feb. 15. The IRS noted that these refunds likely will not reach taxpayers until the week of Feb. 27. Stay tuned to the Intuit® ProConnect™ Tax Pro Center for continuous updates. Previous Post Meet the Difference Makers: John Jones Next Post Tech Tools to be More (or Sometimes Less) Connected to… Written by Mike D'Avolio, CPA, JD Mike D’Avolio, CPA, JD, is a tax law specialist for Intuit® ProConnect™ Group, where he has worked since 1987. He monitors legislative and regulatory activity, serves as a government liaison, circulates information to employees and customers, analyzes and tests software, trains employees and customers, and serves as a public relations representative. More from Mike D'Avolio, CPA, JD Comments are closed. Browse Related Articles Practice Management ChatGPT for accountants Tax Law and News Tax breaks for victims of natural disasters Tax Law and News 7 warning signs ERC claims may be incorrect Advisory Services Building a 7-figure+ firm in less than 5 years Practice Management Offshoring tax and accounting services Tax Law and News Register with IRS to monetize clean energy credits Tax Law and News Cost segregation and benefits to your clients Practice Management ¿Cómo se comparan tus tarifas de preparación de impu… Advisory Services How a family office benefits your practice Practice Management How do your tax prep fees stack up?