HomeIRSFamilies with low incomes may not receive their tax refunds until March...

Families with low incomes may not receive their tax refunds until March or later.

For the majority of the time, a delayed tax refund is an unavoidable irritation. An unexpected refund delay could mean the difference between making ends meet and falling into financial ruin this year.

Consumer costs are currently skyrocketing across the board as a result of high levels of inflation. Lower-income households, particularly those without any money in savings to fall back on, have been particularly hard hit as a result of this.

 

The fact that monthly installment payments under the expanded Child Tax Credit ceased in December, despite the fact that beneficiaries had hoped that they would be extended until 2022, only adds to the difficulty of the situation.

These monthly payments contributed to the emancipation of millions of children from poverty and the ability of families to meet their financial obligations in the face of escalating living costs.

And, despite the fact that President Biden included a one-year extension of the enhanced credit in his Build Back Better legislation, the legislation appears to be doomed.

As a result, many tax filers are no doubt anticipating the arrival of their tax refunds with bated breath. However, certain filers — notably those who may be in the most need of the money — may have to wait longer to receive it.

When fraud prevention has a negative impact on individuals

People who claim the Earned Income Tax Credit (EITC) or the Additional Child Tax Credit (ACTC) will typically have to wait until early March or later to receive their refunds unless they submit an extension.

What is the explanation for this? The PATH Act of 2015 compels the Internal Revenue Service to withhold payments for certain specific credits until February 15, citing a high incidence of fraud involving them.

They are both refundable, which means a filer can receive a refund even if they do not owe any tax at the time of filing. Numerous tax credits are non-refundable, and the best that they may accomplish is to decrease a filer’s tax liability to zero dollars. However, because to the fact that the EITC and ACTC are refundable, they are a popular target for thieves.

Aside from that, it takes time for tax refunds to come after they have been approved by the IRS for processing. In other words, despite the fact that the EITC and ACTC deadlines are approaching, the IRS says the earliest that claimants can anticipate their money is the first week of March.

More troublingly, customers claiming these credits will have their whole return withheld until Feb. 15 — even though just a portion of their refund is related directly to these credits. As a general rule, the Internal Revenue Service does not issue partial refunds, so anyone who finds themselves in this predicament will simply have to wait it out.

How to get your tax refund as soon as possible

If you are eligible for the Earned Income Tax Credit (EITC) or the American Opportunity Tax Credit (ACTC), you should claim it regardless of the annoying delays associated with them. Both credits have the potential to be extremely lucrative, and it is not worth giving up that money in order to receive your return sooner.

If you’re claiming one of those credits or not, you can take the following measures to help expedite your refund:

  • Instead of filing your taxes on paper, consider filing them electronically.
  • Make sure that your tax refund is free of mistakes.
  • If you prefer not to wait for a refund cheque in the mail, you can have it transferred straight into your bank account.

It’s a shame that the folks who are most in need of their tax refunds will be subjected to unavoidable delays. However, eliminating tax fraud is a positive step, and doing so may assist to ensure that these valuable credits are preserved for the long term.

Read More

LEAVE A REPLY

Please enter your comment!
Please enter your name here

- Advertisment -

Latest Article