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IRS Warns Of Delays In Tax Refunds For Those Who Claim Two Key Tax Credits

Image of 2012 Tax Form 1040

Image of 2012 Tax Form 1040

WASHINGTON – The Internal Revenue Service today reminded New Hampshire taxpayers who claim the Earned Income Tax Credit (EITC) or Additional Child Tax Credit (ACTC) to plan on a refund delay until Feb.15. 

A recent federal law change aimed at making it easier for the IRS to detect and prevent refund fraud, requires the IRS to hold the refund of any tax return claiming either the EITC or ACTC until Feb. 15. By law, the IRS must hold the entire refund not just the portion related to these credits.

“I want to remind folks that as we move into the holiday season, some refunds will be delayed next year so they should plan ahead,” said IRS spokesperson Matt Leas. “To avoid any further delays, it’s important that taxpayers file as they normally would and not wait until later in the filing season.”

As of June 2016, 75,000 working individuals and families in New Hampshire received $150 million  in EITC alone, putting an average of $1992 into the pockets of low-income working individuals and families. Similarly, 41,100 working individuals and families in the state received a total of $49.36 million in ACTC, an average of $1,341per individuals and families. The IRS emphasizes that these are full-year totals for both of these credits and that only those claims filed before February 15 will be affected by the new law.

To avoid any further delays on their refunds, the IRS asks New Hampshire taxpayers to file their returns as they normally do, not wait to file later in the season. Whether or not claiming the EITC or ACTC, the IRS cautions taxpayers not to count on getting a refund by a certain date, especially when making major purchases or paying other financial obligations. The IRS issues more than nine out of 10 refunds in less than 21 days, some returns however, are held for further review.

Because the entire tax refund and not only the credit portion will be held until February 15, the IRS  encourages taxpayers to file a complete and accurate return the first time which will likely result in a faster refund. Amended returns take up to 16 weeks to process.

The IRS also encourages taxpayers to consider a tax-withholding checkup. By adjusting Form W-4, Employee’s Withholding Allowance Certificate, taxpayers can ensure the right amount is taken out of their pay so that they will not have to pay too much tax or wait until they file their return to get a refund. Taxpayers should submit the revised form to employers, and employers will use the form to figure the amount of federal income tax to be withheld from pay. For help, use the Withholding Calculator on IRS.gov.

The IRS has a special page on IRS.gov with steps to take now for the 2017 tax filing season.

Congress Votes Tomorrow On Everything That Will Happen For The Rest Of Obama’s Presidency

Congress West Front Late last night, House GOP leadership announced a compromise bill that will (temporarily) end all the Congress-created crises by setting the federal budget and suspending the debt limit through the end of the Obama presidency.

The House is expected to vote on the bill tomorrow (Wednesday). A draft of the bill is available here.

What it doesn’t do, from the perspective of the Right Wing:

  1. It doesn’t try to force through the Keystone XL Pipeline.
  2. It doesn’t try to de-fund Planned Parenthood.
  3. It doesn’t try to repeal the Affordable Care Act.
  4. It doesn’t try to voucherize Medicare.
  5. It doesn’t try to privatize Social Security.

What it doesn’t do, from the perspective of the Working Class:

  1. It doesn’t rein in corporate giveaways to stockholders, such as dividends and buybacks. (Trillions of dollars that corporations could have used to create jobs, pay fair wages and make long-term investments.)
  2. It doesn’t end the tax preference for unearned income. (Most investment income is still taxed at about half the rate of wage income.) Ending this tax preference could end the budget deficit.
  3. It doesn’t eliminate the Social Security wage cap (which would strengthen Social Security, long-term).
  4. It doesn’t raise the minimum wage.
  5. In its current form, it doesn’t do much to reverse previous cuts to Food Stamps, veterans benefits, and other safety-net programs. It doesn’t mention the 2.1 million American workers who are long-term unemployed… or the 1-in-five American children who are living in poverty.

What it does do:

  1. It loosens the Sequester budget restrictions, both for defense and non-defense spending – and it also increases an off-budget military spending account.
  2. It completely rewrites the procedures governing IRS audits of business partnerships. (Call me cynical, but I’m guessing that part of the bill was written by somebody’s lobbyist.)
  3. It diverts some Social Security tax revenue into the Social Security Disability Trust Fund, and *privacy alert* it also creates a new information clearinghouse (presumably, to be used to detect fraud).
  4. It reduces payments to some Medicare providers and regulates the increase in Medicare supplement policy premiums.
    AND
  5. It renames the small House rotunda… in honor of the House Freedom Caucus.

It does some other things. Please take the time to read through the bill yourself – and encourage your Congressional representatives to do the same. Contact information for those representatives is available here.

————-

Having watched this impossibly deadlocked Congress — and its impossibly intransigent Right Wing

Personally, if this “grand compromise” happens, I don’t expect anything else to get through this Congress until President Obama leaves office.  (Remember, GOP extremists have been working to “submarine his presidency” since the very first day of his first term.)

NH State Senator Fuller-Clark Encourages Residents To File Their Taxes For Free

Fuller Clark Urges Constituents to Prepare for Tax Day on April 15 and Use IRS Free File for Online Tax Assistance E-Filing or Extensions

Taxpayers Making $58,000 or Less Can Visit www.IRS.gov/freefile to Prepare and E-File Federal Tax Returns with Free Software & Step-by-Step Help

(Portsmouth,NH) – Senator Martha Fuller Clark today encouraged constituents to take advantage of free tax preparation services available through the Free File program. Every taxpayer with a 2013 Adjusted Gross Income of $58,000 or less may visit www.IRS.gov/freefile to prepare, complete and e-file their federal tax returns at no cost.

Free File is made possible through a partnership between the IRS and the Free File Alliance, a coalition of industry-leading tax software companies. Since its inception in 2003, the program has offered 70 percent of taxpayers free access to leading commercial tax preparation software from Free File Alliance member companies. Free File has already saved taxpayers an estimated $1.2 billion in filing costs.

“Since Tax Day is quickly approaching, I encourage taxpayers making $58,000 or less to take advantage of the free tax services available from the IRS and Free File Alliance by visiting www.IRS.gov/freefile,” said Senator Martha Fuller Clark. “Anyone can use Free File to electronically file a tax return or, if necessary, submit an extension – giving themselves an extra six months to prepare and file a federal tax return.”

IRS Free File is available at www.IRS.gov/freefile, which provides a list of Free File Alliance member companies and their free tax software offerings. Users may either choose the company that fits their needs or utilize the “Help me Find Free File Software” tool. After selecting a company, users will be transferred to the company’s website to prepare, complete and electronically file their federal income tax returns. The service is also available in Spanish.

Free File also offers basic federal e-filing services with no income limitations. This basic e-filing service, called Free File Fillable Forms, allows taxpayers who are familiar with tax law and need no preparation assistance to complete and file their federal income tax electronically. It is also available at www.IRS.gov/freefile.

“Free File makes tax time simple, fast and free for 70 percent of Americans,” said Tim Hugo, executive director of the Free File Alliance. “Since 2003, the Free File Alliance has partnered with the IRS to give taxpayers access to leading online tax preparation software and critical step-by-step support. This year, we invite every taxpayer making $58,000 or less to join the 40 million Americans who have already saved time and money by using Free File.”

Free File Alliance member companies have continually worked with the IRS to strengthen the Free File program, and taxpayers have consistently reported that it is user-friendly and efficient. Responding to a 2009 IRS survey, 96 percent of users said they found Free File easy to use, while 98 percent said they would recommend the program to others.

 

About the Free File Alliance

The Free File Alliance, a coalition of 14 industry-leading tax software companies, has partnered with the IRS since 2003 to help low and middle-income Americans prepare, complete and e-file their federal tax returns online. The Free File Alliance is committed to giving 70 percent of Americans free access to the industry’s top online tax preparation software. About 40 million returns have been filed through Free File since its inception. For more information, visit www.freefilealliance.org.

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