Some taxpayers who plan to file their tax returns at the beginning of tax season later this month will experience a delay in their refunds.
The delay affects people claiming Earned Income Tax Credit or the Additional Child Tax Credit.
Under the Protecting Americans Against Tax Hikes Act (PATH), which went into effect on Jan 1, 2017, the Internal Revenue Service will hold the entire refund on tax returns that include EITC or ACTC claims until mid- February. Many of the affected taxpayers may not have access to their refunds until the week of Feb. 27.
According to Temple’s Jackson Hewitt Senior Manager Karyn Campbell, this delay is longer than they have ever seen.
"With it being delayed, the impact we see. Clients who file in January are expecting that refund the first of February to pay their rent, they may pay to catch up on their Christmas bills. They just exceeded their credit cards on Christmas,” Campbell said.
According to the IRS, the additional time helps the IRS stop fraudulent refunds from getting issued to identity thieves. In addition, the agency states it would help stop fraudulent claims.
Jackson Hewitt will offer a refund advance, which is interest free, for up to $1,300 for all of its eligible customers. The amount taxpayers receive from the loan will later come out of that person’s refund issued by the IRS at a later time, according to Campbell.
"We know the impact that the refunds being delayed of the customers is going to have. A lot of us get wrapped up in that as well. Customers are trained as a community to receive money on a certain day and we don't get that, it throws us in financial distress, if you will,” Campbell said.
Tax season will begin Monday, Jan. 23 and end Tuesday, April 18th.
Copyright 2017 KXXV. All rights reserved.
