Tax season starts in one week, on January 23, 2017. However, the Internal Revenue Service (IRS) warns of refund check delays. The IRS is increasing fraud prevention for all taxpayers. They’ll also increase scrutiny of all tax returns claiming Earned Income Tax (EITC) and the Additional Child Tax Credit (ACTC). Those extra steps will cause IRS refund delays for certain credits families take.
Tax delays for families
EITC helps working individuals and families with low to moderate income. A taxpayer’s income and number of children impact the amount of the credit.
There’s the Child Tax Credit and the Additional Child Tax Credit. The Child Tax Credit is $1,000 per qualifying child. That actually reduces your tax balance by $1,000. However, it’s a non-refundable credit. That means it can’t take your tax bill below $0. If that happens, the ACTC helps. With ACTC, you get a tax refund for the unused portion of the Child Tax Credit.
By law, the IRS must hold tax returns claiming an EITC or ACTC to ensure the returns go through the proper fraud filters. Fraud is a big problem with tax returns. Thieves file fake information, and steal legitimate taxpayers refund checks. Often taxpayers don’t realize they are a victim of tax return fraud until they file their taxes or their refund check doesn’t show up.
All taxpayers claiming an EITC or ACTC will be subject to the extra filters. Money related to the credits will be released February 15th. The IRS will delay payment, and it may take more time for banks to accept those refunds. The IRS says money should arrive in bank accounts by February 27th for any early filers.
You can always check to see the status of any refund at “Where’s My Refund” on the IRS site. However, EITC and ACTC refunds will not even show a delivery date until the February 15th date passes.
Free tax return help
There are programs to help the elderly and low-income families prepare their taxes. The Volunteer Income Tax Assistance (VITA) and Tax Counseling for the Elderly (TCE) offer free tax help for qualifying taxpayers. The service is available if you make less than $54,000, have a disability, or speak limited English. The elderly program is for anyone over age 60. You can search for free tax return help by zip code.
Taxpayers can also file their own returns for free. You qualify for Free File software if your income is below $64,000. However, most software programs charge to file your state tax return. Read the fine print of each software program, so you know the cost of the state return before filing your federal return.
Important tax dates
You get an extra day to file your taxes in 2017. Washington, D.C., is celebrating Emancipation Day on the 17th. So, the tax deadline is pushed back until April 18, 2017.