Faster tax refunds for EITC recipients?
The 2022 tax season starts in Ernest le Monday and it could be difficult. The IRS is starting this year with a large backlog of unprocessed tax returns from last year, possibly as high as 10 million. The agency advises taxpayers to file early and electronically to get their refund faster.
A group of taxpayers however will have to wait until at least February 15 to obtain their tax refund, even if they drop off early. By law, the IRS must withhold refunds for those claiming the Earned Income Tax Credit (EITC).
This deadline is for allow time for the IRS to match the information personal income tax returns with information on W-2 forms from employers, which are sent to the IRS by January 31 to prevent identity theft and fraud. But it also has the effect of delaying any payment on the Child Tax Credit taxpayers may be eligible.
To remedy the situation, US Representatives Bill Pascrell, Jr and Richard Neal have introduced legislation removing the tax refund delay and accelerating tax refunds for filers applying for the EITC.
“While well intentioned, these delays are hurting too many ordinary Americans, we are therefore proposing this simple change to remove the hold on refunds and allow the IRS to issue prompt refunds to all first filers,” the members of Congress said in a joint statement.
The proposed bill would allow the IRS to issue refunds before Feb. 15 if the tax return amount was verified with W-2 forms.
“Americans who file their taxes early should not be penalized for their scruples.”