For taxpayers who claimed the Earned Income Tax Credit (EITC) or Additional Child Tax Credit (ACTC), this is the week that those refunds will start to arrive in bank accounts or on debit cards. Due to a new law designed to reduce rates of tax identity fraud, the IRS this year began holding refund checks for EITC and ACTC-eligible filers until February 15. Because of the President’s Day and other bank holidays, filers who applied for those credits won’t start seeing their refunds in their accounts until today. Impacted individuals can check the status of their refund online or on the IRS2Go mobile app.
For many of these families, a tax refund can represent more than 30 percent of their annual household income, making any delays especially stressful. The EITC is one of the impactful poverty reduction programs in America. In the last year alone, the EITC lifted 6.5 million Americans out of poverty, including 3.3 million children. The program has also been found to grow local economies, particularly in low income metropolitan areas. It has one of the highest participation rates for such a program, with 79 percent of those eligible claiming the credit.
While that’s excellent. The more than 20 percent of those who are eligible for the EITC do not claim are potentially missing out on thousands of dollars in tax credit that they’re owed. Why is this? Unfortunately, millions of eligible families are missing out simply because they do not have all the information they need about the tax breaks available to them. The best way to get that information is to take advantage of free IRS tax preparation resources, like the Free File program and Volunteer Income Tax Assistance programs. With resources like these, individuals don’t have to guess about their eligibility. With the help of IRS-certified volunteers or the IRS EITC assistant, working families can make sure the EITC works just as hard for them.