If your Income Tax Refund is delayed because of the PATH Act

If your Income Tax Refund is delayed because of the PATH Act

If your Income Tax Refund is delayed because of the PATH Act


The PATH Act was passed in the year 2015 and it would include some changes brought to the tax laws in the US. The PATH Act would include bringing up changes into the two major tax credits i.e. The Additional Child Tax Credit (ACTC) and the Earned Income Tax Credit (EITC). 

The refundable part of the ACTC is known as the Child Tax Credit (CTC). EITC is a mean-based tax credit that is refundable and it’s worth would be more than $6,000. 

The PATH (Protecting Americans from Tax Hikes) Act was signed into a bill in the year 2015. According to the PATH Act, the IRS will not issue refunds which would include the EITC and ACTC before the mid of February.

The PATH Act applies to all tax preparation methods and its main objective is to help in detecting and prevention any tax frauds. Moreover, by the extension in the release of refund, the IRS gets time to ascertain that the taxpayers are properly claiming their tax credits.

PATH Act and the Extended Tax Credits  

Those taxpayers who are willing to claim the ACTC (Additional Child Tax Credit) can avail a significant break on their federal income tax. This break can be up to 15% of the income the taxpayer family has earned above the initial threshold of $3000.

Let us illustrate this with the help of an example.

  1. Suppose, a family has an income of $40,000 then the refund of 15% would be applied on the $37,000 which is the amount that is left after the threshold of $3000 has been applied.
  2. The expiring tax laws can raise this tax threshold to around $10,000 which can lower your tax refund amount but the PATH Act would help in keeping the threshold fixed at $3000 permanently.

Similarly, the PATH Act would help in permanently increasing the phase-out threshold for the EITC (Earned Income Tax Credit) by an amount of $5000 for those who are married and filing their tax returns jointly. This implies that those couples who have earned more than $5000 would have been originally allowed might now receive the complete EITC for their income. 

Some additional changes to the EITC

There have been some additional changes to the EITC by the PATH Act which can have an impact on your tax returns. 

  1. The Social Security Number (SSN) is always necessary to claim the EITC. However, according to the older tax laws the credit could have been claimed even for those years for which the taxpayer did not have an SSN.
  2. By the PATH Act, EITC cannot be claimed for those years in which the taxpayer did not have a valid SSN. 
  3. Taxpayers who are claiming the EITC by erroneous means can be penalized by the IRS under the provisions of the PATH Act. This can also restrict the taxpayer from claiming the EITC credit for the upcoming 10 years.

Delay in the tax refunds

Most of the taxpayers who are claiming the EITC and ACTC would be experiencing a delay in the receipt of their tax refunds. According to the PATH Act’s provisions, the IRS should withhold the tax refund for those taxpayers who are claiming these credits till 15th February 2021.

In case, a taxpayer is filing his tax returns before 15th February then he owes a tax refund and in case he is claiming the EITC or ACTC then the refunds would be withheld until the 15th February deadline.  By this delay, the IRS would get a considerable amount of time to match up the information present on a taxpayer’s tax returns and the respective W-2 forms.  This would help detect and prevent identity thefts and tax frauds. 

According to the IRS, if a taxpayer has claimed the EITC and ACTC then he can expect to obtain his tax refund by the first week of March. This would be feasible if the below-mentioned conditions are satisfied:-

  1. The tax returns are filed online by the taxpayer
  2. The taxpayer would get his refund by Direct Deposit
  3. There have been no issues found with the filing of the tax returns


Hence, if the credits EITC and the ACTC are being claimed then the taxpayer must be prepared to experience a delay in receiving their tax refund. The refund status can always be checked by using the “Where’s My Refund” tool or by using the IRS2Goapp.


All you need to know about your Income Tax Refund Status

All you need to know about your Income Tax Refund Status

All you need to know about your Income Tax Refund Status


One of the most common questions of the taxpayers during the tax season is “Where is my tax refund?” The IRS would start its tax refund processing from 12th February and the refunds would have to go through mainly three stages.

  1. The Return received
  2. The Return approved
  3. The Refund sent 

 The time is taken for the refund processing

 In general, the time taken for processing the Income Tax Refund by the IRS would depend upon the mode that has been used for filing Income Tax Returns.

Tax returns filed by Direct Deposit

 When you are filing your tax returns electronically with the Direct Deposit method, you can obtain your tax refunds soon. According to the IRS, within 21 days after acceptance of the Income Tax returns the refund is done for most of the citizens.  

 Tax returns filed by mail

 If the Income Tax returns have been filed by paper then it will take some time and this time might be longer due to the outbreak of the pandemic COVID-19. It has been advised by the IRS to wait for 4 weeks after filing your tax returns before you start checking the status of your tax refund. Also, this processing of tax refund can take longer and can be around 6 to 8 weeks.

Refunds obtained with EITC or ACTC

 The IRS would not be issuing any refunds before mid of February for those tax refunds which would include the EITC (Earned Income Tax Credit) and the ACTC (Additional Child Tax Credit). This rule is applicable under the PATH (Protecting Americans against Tax Hikes) Act. This Act mainly aims at the detection and prevention of tax fraud and applies to all tax preparation methods. By this extension in the refund period, it will give the IRS much more time to ensure that the taxpayers are claiming the tax credits properly. For the filers of the EITC and the ACTC, the IRS considers completing the refund by the first week of March.

 The Process of Income Tax Refund

Let us have a look at the process which is involved in the processing of the Income Tax refund for US citizens.

Status checking after 24-48 hours from e-filing

After filing Income Tax returns, the taxpayers can easily check their status by the use of the IRS tool i.e. “Where’s My Refund?” The major requirements for checking your refund status are the Social Security Number or the ITIN, the exact amount which must be refunded, the filing status of the taxpayer, etc. 

Notice of the Return Received

Once the processing for the Income Tax return has been started by the IRS, the “Where’s My Refund” tool would highlight the status as “Return Received”. Taxpayers would not be able to view their Tax refund date unless the tax return processing has been finished by the IRS and the tax refund has been approved by the IRS.

Change in status 

With the IRS finishing the processing of tax returns and providing confirmation about the approval of tax refund, the status of the “Where’s My Refund” tool would be changing to “Return Approved” from “Return Received”.

Refund Date on Refund tool

Once the status of the tax refund has changed to “Refund approved” a personalized refund date would be specified by the IRS. 

Refund Status on the tool 

In case of your status on the “Where’s My Refund?” tool shows “Refund Sent”, then it means that the tax refund has been sent to the taxpayer’s financial institution for Direct Deposit. If opted for direct deposit, then it usually takes around 1-5 days for the financial institution to fund the deposit into the taxpayer’s account. However, if opted for a tax refund via electronic mail it can take some weeks for the tax refund’s arrival. 

However, despite the simplified procedure taxpayers can have many other questions related to their Tax Refund such as “I have not received my tax refund even the tax return has been received by the IRS since 21 days”, “I have got my tax refund in the form of a cheque even though I had opted for Direct Deposit”, etc. In many cases, the refund can take a long time if there has been an error in the tax return filing or if incomplete information has been received. Moreover, the limit for direct deposits into a particular bank account has been limited to 3 tax refunds in a year. Your limit might have been exceeded. 


So, if the tax refund processing timeline has been exceeded and the anxiety is rising about its status the “Where’s My Refund?” tools can be helpful. Or else you can consider connecting with the IRS support over the phone and enquire more about your status.

How to claim your unclaimed refunds?

How to claim your unclaimed refunds?

To know that you have a refund due to being obtained from the IRS is one of the best things especially in these troubling pandemic times. If your refund amount is a big one, it can be utilized for different purposes such as paying off your debts, investing in an emergency fund, etc. However, you might have missed out on your refunds which were due to be obtained from the IRS. According to the IRS, $2,781 was the unclaimed refund amount available in the year 2020 which is expected to increase more in the year 2021.

The causes for the unclaimed refunds can be different for different taxpayers and so are the methods by which the refunds can be retrieved.

Unclaimed Tax Money and Refunds

According to the IRS, billions of refund checks are bounced back if your address has been changed or there has been a change in your bank account number. The IRS would be unaware of the information related to the new address /new bank account number. Your refund check would return and would lie unclaimed in such a scenario. 

Another vital reason leading to unclaimed tax refunds is that you considered your income to be very low. As a result, you did not prepare your tax returns and did not e-file a tax return as well. For instance, you are a salaried professional, and taxes were being withheld from your paycheck every month. However, you considered your income too low and did not file the tax returns. But, you would be able to claim the money that has been deducted from your salary in the form of a tax refund.  Also, there might be a probability that taxes were not being withheld from your paycheck but you can receive a refundable EITC (Earned Income Tax Credit).

How can you receive your unclaimed refunds?

Some of the methods by which you can easily receive your unclaimed refunds are:-

  1. In case, it has been just less than a year when your tax refund was issued you can put forward a request to the IRS for reissue of the refund. This can be done by use of the IRS’s unclaimed refund database. In this case, for protection, you would have to provide your filing status, Social Security Number, and your refund amount as well. If there is a need to address updation, it can be done here. The advantageous part is that your information related to refund would remain available on this IRS website until the next tax return has been filed.
  2. In another scenario, if it has been more than a year but less than three years since you filed your returns but have not received your refunds – you have two options available. You can request for your lost refund to be reissued. While filing the tax returns, you can use the “Married Filing Jointly” Status and complete Form 3911 which is the Taxpayer Statement Regarding Refund. Also, if you are not using this status you can give a call to the IRS at 1800-829-1954 to request for reissue of your refunds.
  3. If after filing your return request, you found out that a particular credit or deduction would have led to a refund. Or you have made an error while filing your returns then you can make amendments to your tax return and get your unclaimed tax refund. This amendment can be done by filing Form 1040X and mailing it to the IRS. This can take some additional time i.e. up to 16 weeks but would get your unclaimed refunds.


 So, if you have had tax refunds but have not obtained them due to some reasons you can still receive them. Filing a return within three years of the return due date and also filing a return for an earlier year will help you in avoiding penalties related to late returns.

Income Tax Refund V/S Owning tax

Income Tax Refund V/S Owning tax

Income Tax Refund V/S Owning tax

In these challenging times of financial distress caused due to the pandemic COVID-19, receipt of your tax refund is like a gift. If you are receiving a substantial amount as your tax return you can use it for various useful purposes during these difficult times. However, if you have still not received your tax refund and are wondering what could be the reason; it’s time to analyze the possibility i.e. the IRS seized your tax refund.

You might also wonder that “would you obtain your tax refund if you owe tax to the IRS?” So, let us understand the various aspects related to the scenario in which you apprehend the receipt of your tax

When will the IRS seize your tax refund?

If you owe taxes to the IRS, then you would not be able to get back your tax refund. The IRS has the power to garnish your refund to offset the tax debts you owe. Some of the major tax debts which can lead to the IRS’s seizure of your tax refunds are listed below.

a.Back Taxes

You are said to have back taxes when you have any taxes unpaid or partially paid at federal, state, or local level. If you have tax debts at any of these levels, then your tax refunds might be garnished by the IRS. In such cases, the IRS would send you warning notice about a part of the entire of your tax refund being used to offset your back taxes. Even if you have selected for options like the IRS installment agreement plan, the IRS can still take your tax refund back and pay your tax debts by using them.

If you are willing to relieve yourself from the tax debts, you can do so by filing for bankruptcy. If you are filing for bankruptcy, the IRS would provide you with three payment priorities.


  • Priority and non-dischargeable unsecured tax debtThese are those debts that cannot be discharged and must be cleared first before any other debt such as trust fund taxes, taxes that are assessable but have not been assessed, etc.
  • Non-priority and non-dischargeable unsecured tax debtThese taxes are not placed on the top priority and they cannot be discharged. These taxes include taxes on fraudulent returns, taxes filed late within two years of the date of filing, etc.
  • Non-priority and dischargeable unsecured tax debtThese taxes are unsecured, are not prioritized, and can be forgiven too.

b.Child and Spousal Support

In case you are a parent who is providing child support, the Child Support Agency of your state will inform the Treasury Department about your child support debt. The Treasury Department will send you a pre-offset notice which informs you about how much debt you owe the working of the offset program and the ways by which you can pay off your child support debts. This same procedure is applicable for spousal support as well for tax debt offset by the IRS.

c.Other additional debts

In addition to the Child and spousal support, back taxes there are some other debts also which can be garnished by the IRs through the seizure of your tax refunds. These can be your Student loan payments or your State Unemployment compensation.

If you have not paid your federally-insured student loans, the IRS can seize your tax refund for the payment of your outstanding debts related to a Student loan. Moreover, the US Education Department has the authority to let your employer garnish up to 15% of your income until all your loan debts are cleared.

The IRS can also seize your tax refunds in case of any unemployment compensation collected by you for which you were not eligible. The Unemployment program of your State can ask the IRS or the Treasury Department to offset your tax refunds.

How can you obtain your complete tax refund?

If you wish to obtain your entire tax refund without your refund being garnished for tax debt settlement, then you must pay your taxes on time and in full amount. In case, you have other debts like student loans or spousal support debt, etc. you can try to pay your debts as much as you can. This will help you in obtaining some more tax refunds.

 If you are facing tax issues, you must sincerely work towards the resolution of these issues by opting for professional assistance. In the year 2018, over 13 million Americans owed more than any amount of $128 billion to the IRS for taxes and penalties. You should try to find out about the various tax issue resolution services such as the Installment Agreement, Stair Step Agreement, Partial Pay Agreement, etc. for resolving your tax problems.


Hence, a tax refund is important for everyone, especially during these financially difficult times. You must file your tax returns on time and pay your taxes on time. You must accurately file your taxes to make the maximum utilization of your return obtained.