Published February 1st, 2023

Tax season is a crucial time for many individuals and families, especially those who qualify for tax credits like the Earned Income Tax Credit (EITC) and the Additional Child Tax Credit (ACTC). However, if you're expecting a refund due to these credits, you may have to wait a bit longer than usual. Here's what you need to know about the EIC and ACTC refund delay in February.

1. The Law Behind the Delay

The Protecting Americans from Tax Hikes (PATH) Act of 2015 requires the IRS to hold refunds for tax returns claiming the EITC or ACTC until mid-February12. This allows the IRS additional time to prevent fraudulent refund claims from being paid out.

2. Expectations for Your Refund

Although the IRS must hold EITC or ACTC refunds until mid-February, it doesn't necessarily mean you'll receive your refund at that time. Other factors, such as how you filed your return (electronically or by mail), whether there were any errors on your return, and how you chose to receive your refund (direct deposit or check) can affect when you will receive your refund3.

3. Why File Early?

Even with the refund delay, the IRS still recommends filing your tax return as early as possible. Filing early ensures that your refund will be in the queue and processed as soon as the hold is lifted4.

4. Tracking Your Refund

You can track the status of your refund using the IRS' "Where's My Refund?" tool5. It provides personalized information based on the processing of your tax return and is updated once a day.

5. Planning Ahead

Understanding this refund delay can help you plan your financial activities better. If you rely on your tax refund for important expenses, consider adjusting your budget to accommodate the delay.

In conclusion, while the February delay for EITC and ACTC refunds can be a bit frustrating, it's a measure designed to protect taxpayers and the integrity of the tax system. Planning ahead and understanding the process can help ease any potential inconvenience.