Around 150 million Americans file a yearly tax return. Many receive a substantial refund - the average check in 2016 boosted wallets by $2,700. However, anyone who files their tax return early and is depending on receiving their 2017 payment promptly might have to adjust their budgets, as new regulations may delay the refund payments.
In August, the Internal Revenue Services (IRS) released a press release on new fraud-detection tools. They outlined how taxpayers will need to review their tax withholding for the latest season to ensure their details are correct. Between 21 and 26 percent of all Earned Income Tax Credits (EITC) are paid in error, so the IRS's software is targeting fraud related to the EITC and the Additional Child Tax Credit (ACTC).
Under the regulations, anyone claiming refunds for ACTC or EITC will have their refund withheld until mid-February. The new Protecting Americans from Tax Hikes Act (PATH) means that refund checks will be held until February, even if an individual is applying for a tiny percentage relating to EITC or ACTC.
If you're in desperate need of their refunds, the IRS advised reviewing your withholding status and altering as required. For those expecting a large check that includes ACTC or EITC qualifications, lowering tax liability now to boost income for the rest of the year could be a wise move to avoid a cash crisis in 2017.Credit Manager by MoneyTips.