By law, the IRS cannot release refunds for tax filers with refundable credits (i.e. earned income tax credit, additional child tax credit) until February 15th. That means taxpayers who file early and likely need the refund the most have to wait.
For tax season 2020 (2019 tax returns), the IRS stated that these refunds will not be issued until “the first week of March.” Furthermore, taxpayers with refundable credits will not be able to track their refund until February 22nd on the IRS’ Where’s my refund? application.
Congress imposed refund delays three years ago in an attempt to thwart tax fraud. The IRS continues to battle the amount of fraud dealing with EITC. EITC filings generally have high error rates- about 1 in 4 returns with an error. A recent report quantified EITC overpayments for 2018 at $18.4 billion.
Be optimistic and file early
For those affected by the refund delay, it is likely that the IRS issues the EITC refunds prior to the “first week of March.” In prior years, the IRS provided conservative estimates of when to expect these refunds. However, the refunds came in earlier than IRS expectations – usually around February 25th.
If you want your refund fast, follow the best practices: file early, file accurately, and e-file. The IRS states that 90% of all refunds are issued within 21 days (they have kept their promise in recent years). Most e-file refunds occur within 2 weeks if there are no other issues on the return. Paper filed returns take about two week longer.
Refund delays or other issues….
The IRS can delay your refund if there are issues with your tax return or your compliance status. If there are issues and the IRS freezes your refund, you will receive a notice and instructions on next steps. Common refund freeze issues are questionable EITC claims, suspected identity theft, and unfiled prior year returns.
The IRS can also offset your refund to pay for prior tax debts owed or for other non-tax debts such as delinquent student loans and back child support.
Taxpayers in these situations should contact the IRS (filing or tax debt issues) or the Treasury Offset Program (non-tax issues) to resolve their issues.