The IRS has issued a warning about potential delays in tax refunds for those claiming specific tax credits. Here's what you need to know to avoid any surprises when filing your taxes this year.
The Issue:
The Internal Revenue Service (IRS) is reminding taxpayers that refunds for those claiming the Earned Income Tax Credit (EITC) or the Additional Child Tax Credit (ACTC) may be delayed until mid-February. This is due to a provision in the PATH Act of 2015, which mandates that the IRS cannot issue these refunds before this date.
Why the Delay?
The delay is necessary for the IRS to verify the accuracy of income and the identity of the taxpayer. This extra time ensures that the refund process is thorough and secure.
Understanding the Credits:
- Earned Income Tax Credit (EITC): This credit provides up to $649 for taxpayers with no children and up to $8,046 for those with three or more children. The actual amount depends on factors like income and the number of children.
- Additional Child Tax Credit (ACTC): Part of the standard Child Tax Credit, it is worth $2,200 per qualifying child under 17. Up to $1,700 of this credit can be included in the refund.
When to Expect Your Refund:
According to the IRS, those who claimed either credit can expect their refund by March 2 if they file their return online, choose direct deposit, and the IRS finds no issues with their return. However, if the IRS discovers any issues, the payment could be delayed, and they will contact you for more information.
Refund Tracking:
Taxpayers can track the status of their refund using the IRS's Where's My Refund tool. Typically, those who submit their return electronically and choose direct deposit will receive payment within 21 days after the return is accepted. The refund status will appear around 24 hours after e-filing a current-year return, 3 or 4 days after e-filing a prior-year return, or 4 weeks after filing a paper return.
Important Deadlines:
Remember, taxpayers have until April 15, 2026, to file their 2025 return to avoid fines and penalties. So, plan ahead and be aware of these potential delays to ensure a smooth tax filing process.
