Some Tax Refunds Will Be Delayed in 2017

As the holidays approach, the Internal Revenue Service today reminded taxpayers to remember that a new law requires the IRS to hold refunds until mid-February in 2017 for people claiming the Earned Income Tax Credit (EITC) or the Additional Child Tax Credit (ACTC). In addition, new identity theft and refund fraud safeguards put in place by the IRS and the states may mean some tax returns and refunds face additional review.

Some Refunds Delayed in 2017

Beginning in 2017, a new law approved by Congress requires the IRS to hold refunds on tax returns claiming the EITC or the ACTC until mid-February. The IRS must hold the entire refund — even the portion not associated with the EITC and ACTC — until at least Feb. 15. This change helps ensure that taxpayers get the refund they are owed by giving the agency more time to help detect and prevent fraud.

“This is an important change as some of these taxpayers are used to getting an early refund,” said IRS Commissioner John Koskinen. “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.”

Stronger Security Filters and Tax Refund Processing

As the IRS steps up its efforts to combat identity theft and tax refund fraud through its many processing filters, legitimate refund returns sometimes get delayed during the review process. While the IRS is working diligently to stop the issuance of fraudulent refunds, it also remains focused on releasing legitimate refunds as quickly as possible.

Recently, the Internal Revenue Service, state tax agencies and industry partners finalized plans for 2017 to improve identity theft protections for individual and business taxpayers. This comes after making significant inroads this year against fraudulent returns. The change delaying refunds is one of several additional safeguards that will be set in place for the upcoming 2017 filing season.