Yahoo Finance Here’s Why 40 Million Tax Refunds May Be Delayed This Year
Some taxpayers are going to have to wait a little longer than usual for their refunds this year.
In an effort to fight identity theft and fraud, the IRS is purposefully slowing the refunds for anyone who claims the Earned Income Tax Credit or the Additional Child Tax Credit. Although taxpayers can begin filing tax returns today, due to additional processing time the delay effectively means anyone hoping for a check from the government will not see any money back until February 27 at the earliest.
The delay in refunds will certainly hurt low-income families, many of who will rely on the cash to simply pay for day-to-day items and keep up with bills, and possibly the economy. Earned income credits are one of the far-reaching assistance programs the federal government uses. In 2014, nearly 29 million families received earned income credits, totaling more than $72 billion. Without that money, some family will cut back on spending until later in the year.
(More from Fortune: Here’s How Much You Will Pay Under Trump’s Tax Plan)
Unfortunately, fraudsters claiming earned income credits have been taking advantage of the system for years, to the tune of billions of dollars. The IRS estimates it issued $3.1 billion in tax refunds to identity thieves in 2014 and $5.8 billion the year before, though it did prevent $47 billion in fraudulent payments over the same time period.
The Additional Child Tax Credit assists families who do not owe enough in federal taxes to claim the entire $1000 they are entitled to. In 2014, about 20 million families claimed the credit, which created $27 billion in extra refunds.
Although the IRS will be taking extra precautions to verify the legitimacy of incoming tax returns, it said most tax returns will still be issued within 21 days. Getting antsy about your refund? After February 15, you can go to the IRS' website to check the status of your return.
See original article on Fortune.com
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