The holiday season is officially upon us and for most it brings joy, splendor and excitement. Many of us like to spend big this time of year, so we either saved for it during the year or we plan to leverage a foreseeable tax refund to offset holiday spending.
This year Congress has issued a new tax law that may impact 2017 refunds for many taxpayers. The tax law now requires the IRS to hold refunds until mid-February for people who claim Earned Income Tax Credit or the Additional Child Tax Credit. The IRS will hold the entire refund, even the portion that is not associated with the EITC and ACTC until at least February 15th.
The tax law was promulgated because of rising identity theft and refund fraud, and its purpose helps to ensure that taxpayers are issued refunds that are owed to them. The extra time gives the agency more time to help detect and prevent fraud. IRS commissioner John Koskinen explained, “This is an important change as some of these taxpayers are used to getting an early refund. We want people to be aware of the change for their planning purposes during the holidays. We don’t want anyone caught by surprise if they get their refund a few weeks later than in previous years.”
The IRS will continue to accept and process tax returns as normal, once the filing season begins. Most taxpayers can expect their refunds to be issued within the normal 21-day timeframe after the return has been accepted for processing by the IRS. To learn more about the new legislation surrounding delayed tax refunds, visit www.irs.gov.
Angelia White is an enrolled agent, licensed by the US Department of the Treasury to represent taxpayers before the IRS for audits, collections and appeals. To attain the enrolled agent designation, candidates must demonstrate expertise in taxation, fulfill continuing education credits and adhere to a stringent code of ethics.