The Protecting Americans from Tax Hikes (PATH) Act required the IRS to hold all refunds for returns claiming the earned income tax credit (EITC) and additional child tax credit (ACTC) until February 15.
PATH ACT LAW! – By law, the IRS cannot issue refunds for people claiming the Earned Income Tax Credit (EITC) or Additional Child Tax Credit (ACTC) before February 15th. The law requires the IRS to hold the entire refund — even the portion not associated with EITC or ACTC. The IRS expects the earliest EITC/ACTC related refunds to be available in taxpayer bank accounts or debit cards starting on Feb. 27, 2019, if direct deposit was used and there are no other issues with the tax return. This additional period is due to several factors, including the Presidents Day holiday and banking and financial systems needing time to process deposits. This law change, which took effect at the beginning of 2017, helps ensure that taxpayers receive the refund they’re due by giving the IRS more time to detect and prevent fraud.
What impact does PATH ACT have on taxpayers?
This legislation will create funding delays of up to six weeks or more for an estimated 30M taxpayers filing at the beginning of the tax season. As much as $100B+ in federal tax refunds may be delayed.
Why Is The Delay Happening?
On December 18, 2015, Congress passed the PATH (Protecting Americans from Tax Hikes) Act which made over 20 tax provisions permanent, including tax credit expansions to the EITC, ACTC, and American Opportunity Tax Credit (AOTC) that were set to expire in 2017. The PATH Act also requires a change in the issuing of EITC and ACTC refunds.
No refund will be made to a taxpayer before February 15 if the taxpayer claimed the Earned Income Tax Credit or Additional Child Tax Credit on the return. This will allow the IRS to verify income reported on those returns since employers are now required to file W-2 forms and 1099s by January 31 (previously they had until March).
Most refunds are expected to be issued within 21 days of processing. If the IRS identifies significant mismatches between the income information provided on the return and provided by employers, there can be additional delays as the IRS seeks to resolve the mismatch.
On February 16th why did my status change to Still Processing?
Everybodys Where’s My Refund? statuses changed to the Still Processing because the PATH hold came to an end at 11:59:59 on February 15th.
After the PATH ACT message when was the first updates?
Based off of previous year’s tax Filing Season the PATH message lifted at 11:59:59 pm Feb. 15th and at 12:00 am Feb. 16 and all taxpayers affected by the path message returned back to the Still Processing Message.
- During 2017 tax season the first Direct Deposit Dates started pouring in at 3:30 am Friday, Febuary 17, 2017 with update for the majority of early filers with daily accounts with 2/22 Direct Deposit Dates. The majority of early filer weekly accounts that were approved and held under the PATH Hold updated Saturday, February 18, 2017 with Direct Deposit Dates of 2/23. Then the following week the IRS returned to normal processing of daily accounts receiving updates on Wednesday mornings and weekly accounts received updates on Saturday Mornings.
- During 2018 tax season the first Direct Deposit Dates started pouring in at 3:30 am Friday, February 16, 2018, with an update for the majority of early filers with daily accounts with 2/21 Direct Deposit Dates. The majority of early filer weekly accounts that were approved and held under the PATH Hold updated Saturday, February 17, 2018, with Direct Deposit Dates of 2/22. Affective starting in 2018 all major tax refund updates for both daily and weekly accounts see most updates on Saturday mornings. Starting the following week Saturday, February 24, 2018, the IRS returned to normal processing of daily and weekly accounts with both receiving updates on Saturday Mornings.
Can I get a Deposit before
- All current year tax returns that claim EITC and/or ACTC filed before February 15th, will contain a C- freeze on the account, to hold the refund.
- Prior to February 15th, the refund cannot be released:
- by inputting any type of adjustment to the account
- due to a hardship (hardships will not be considered as long as the C- freeze is on the account). This includes the part of the refund that is not associated with the EITC or ACTC.
- The C- freezes will be systemically released on February 15th.
If my cycle code is daily will I update from Path on Wednesday Morning?
No, If you claimed EITC and/or ACTC the system generates a Posting Delay Code on transactions resulting in the transaction being held until the weekly processing meaning you will see refund updates on WMR on Saturday Mornings.
Does the PATH ACT Message mean I am done processing?
- AFTER February 15th as the message says or
- When you receive a letter in the mail from the IRS or
- When you wake to a deposit in your account.
Prior to February 15th, the refund cannot be released for any reason.
PATH ACT Facts
- File as you normally do. You do not need to change the way you file your tax return, including where you get your taxes done.
- The delay applies to all methods of tax filing – at a commercial tax preparer, or self-preparation. No one can provide your refund before February 15. There are no exceptions.
- The purpose of the refund delay is to help protect you and your refund.
- Beware of offers of loans against delayed refunds, such as a loan on a refund claim based on a year-end
paystubinstead of a W-2. Loan fees are expensive and the return may be inaccurate without all income information, but the loan must be repaid.
- While the delay applies specifically to tax filers claiming the EITC and ACTC, it will affect your entire refund, including refunds based on over withholding or other tax credits. You cannot receive a partial refund.
- Everyone is not affected by the delay. Taxpayers claiming the EITC and ACTC who file returns after February 15 will not be impacted. Additionally, early filers who are ineligible to claim the EITC or ACTC will not be affected. Refunds based only on over withholding or other tax credits will not be held.