When the IRS can process a refund if the Taxpayer claims EIC or Additional Child Tax Credit

The Protecting Americans from Tax Hikes Act of 2015 (PATH Act) was enacted on December 18, 2015, and it made several changes affecting the processing of tax returns if the taxpayer claims Earned Income Tax Credit and/or the Additional Child Tax Credit. The PATH Act mandates that starting last year (2016) and for all future tax years, no credit or refund for an overpayment for a taxable year shall be made to a taxpayer before February 15, if the taxpayer claimed Earned Income Credit or Additional Tax Credit on the return. This provision is a permanent change to tax law and as such, is applicable to the 2017 tax season and all future tax seasons unless Congress changes this requirement.

Taxpayers should file as they normally do, and tax preparers should also submit returns as they normally do. This delay in the processing of refunds does not affect when returns are accepted by the IRS or their processing of acknowledgements.

In fact, the IRS will begin accepting and processing tax returns once the electronic filing season begins on January 29, 2018, but refunds when the taxpayer claimed Earned Income Credit or the Additional Child Tax Credit can not be issued until February 15. This provision only affects when the refund on these returns can be released because the PATH Act mandates that the IRS wait until February 15 before it issues a refund on any return that claims EIC or the Additional Child Tax Credit.