The IRS will begin accepting tax returns on January 29, but tax refunds may be slower than usual this year. Not only is there a delay for taxpayers who claim certain tax credits, the government shutdown may play a huge role in the timely processing of tax returns.
A tax refund delay is not good news if you are earmarking your refund check to pay off bills, buy a car, or take a much-needed vacation. Even if you file early, you may not see the refund in your bank account until late February — and that’s assuming you don’t have any glaring errors and the government shutdown doesn’t last long.
Here are three reasons why your tax refund could be delayed this year.
Government shutdown — If the shutdown doesn’t end before Monday, the IRS will not shut down. However, more than 56 percent of the Internal Revenue Service’s workforce will be automatically furloughed during the shutdown. According to Boston.com, that means 45,500 employees will be forced to stay home, leaving a staff of 35,565 IRS employees on the job.
Normally, all employees would be sent home during a government shutdown, but CNN reports that a contingency plan was put in place because it’s tax filing season. But don’t get too excited about your refund coming anytime soon.
Tax returns will be processed, but here comes the bad news — returns will not be processed during the shutdown. Audits, return examinations, and non-automated collections will be halted as well.
Considering the IRS is scheduled to start processing tax returns on January 29, even if your refund is accepted quickly, refunds won’t be issued until after the government is back up and running. Of note, the last shutdown in 2013 lasted 16 days and, according to VOX, refunds totaling almost $4 billion were delayed.
Tax credits — In 2016, changes were made to the PATH Act (Protecting Americans from Tax Hikes) that require the IRS to hold refunds for all taxpayers who claim EITC (Earned Income Tax Credit) and/or ACTC (Additional Child Tax Credit) until February 15.
According to a previous report by the Inquisitr, refunds to taxpayers claiming one or both of these tax credits won’t show up in your bank account via direct deposit until at least February 27. That date may be delayed depending on how long the government shutdown lasts.
Errors on your return — In addition to the delays caused by the government shutdown or tax credits, some refunds could be held up due to information that is missing on your return, or numbers that don’t add up. Intuit reports that common reasons for a hold on your refund include forgetting to add the social security numbers of your dependents, calculation errors, social security number mismatch, and, for paper returns, forgetting to attach your W-2 or 1099 forms.