Tax Law and News IRS May Delay Returns Claiming EITC or ACTC 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 Modified Jun 18, 2019 2 min read The IRS announced recently that it is planning to change the way it processes tax returns involving the Earned Income Tax Credit (EITC) and Additional Child Tax Credit (ACTC) during the early weeks of the 2017 filing season. Please read below for more details from the IRS: The IRS has announced initial plans for processing tax returns involving the EITC and ACTC during the opening weeks of the 2017 filing season. The IRS is sharing the information now to help the tax community prepare for the 2017 season, and plans are being made for a wider communication effort this summer and fall to alert taxpayers about the changes that will affect some early filers. This action is driven by the Protecting Americans from Tax Hikes Act of 2015 (PATH Act) that was enacted Dec. 18, 2015, and made several changes to the tax law to benefit taxpayers and their families. Sec. 201 of this new law mandates that no credit or refund for an overpayment for a taxable year shall be made to a taxpayer before Feb. 15 if the taxpayer claimed the EITC or ACTC on the return. This change begins Jan. 1, 2017, and may affect some returns filed early in 2017. Tax professionals will want to know the following details: To comply with the law, the IRS will hold the refunds on EITC- and ACTC-related returns until Feb. 15. This allows additional time to help prevent revenue lost due to identity theft and refund fraud related to fabricated wages and withholdings. The IRS will hold the entire refund. Under the new law, the IRS cannot release the part of the refund that is not associated with the EITC and ACTC. Taxpayers should file as they normally do, and tax return preparers should also submit returns as they normally do. The IRS will begin accepting and processing tax returns once the filing season begins, as we do every year. That will not change. The IRS still expects to issue most refunds in less than 21 days, though IRS will hold refunds for EITC- and ACTC-related tax returns filed early in 2017 until Feb. 15 and then begin issuing them. This is one more step the IRS is taking to ensure taxpayers receive the refund they are owed. The IRS plans to work closely with stakeholders and IRS partners to help the public understand this process before they file their tax returns and ensure a smooth transition for this important law change. Watch for more information on this and other tax law updates on the Intuit® ProConnect™ Tax Pro Center. Previous Post Due Diligence Requirements Will Apply to the Child Tax Credit… Next Post Due Date Changes for Tax Year 2016 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 Client Relationships What to Tell Your Clients About Tax Refund Delays Tax Law and News 2021 tax filing season begins Feb. 12, 2021 Tax Law and News 2018 Tax Filing Season Opens Jan. 29 Client Relationships Fraud Associated With the Earned Income Tax Credit Rema… Tax Law and News What Tax Preparers Need to Know About the Earned Income… Tax Law and News Taxpayers may receive a refund for taxes paid on 2020 u… Tax Law and News The future of the Child Tax Credit Tax Law and News Due Diligence Requirements Will Apply to the Child Tax … Practice Management Help Your Clients With Delayed Refunds and Audits Tax Law and News IRS to recalculate taxes on unemployment benefits; refu…