Alabama tax refunds could come late for half a million residents

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Some households may find themselves waiting a little longer for their tax refunds next spring.

Due to an IRS procedural change, households that file early and claim the Earned Income Tax Credit (EITC) or the Additional Child Tax Credit will not see their refunds until after Feb. 15.

The Internal Revenue Service said the delays are the result of a new anti-fraud regulation that will take effect in 2017. The rule will give the agency more time to identify and eliminate fraud in both programs.

These changes are a result of the passage of the Protecting Americans from Tax Hikes Act of 2015. While the majority of the law simply makes some temporary tax credits permanent, other portions of the bill attempt to crack down on what some investigators have called a “formula for fraud.”

In 2014, 27.5 million Americans — and roughly 507,000 Alabamians — filed for the EITC. In Alabama, the EITC average return amount was $2,784, which came in above the national average of $2,400.

”This is an important change to be aware of for some taxpayers used to getting an early refund,” said IRS Commissioner John Koskinen. “We’ll be focusing on awareness of this change throughout the fall, but it’s important for taxpayers who might be affected by this to be aware of the change for their planning purposes. Although we still expect to issue most refunds within 21 days, we don’t want people caught by surprise if they get their refund a few weeks later than previous years.”

The IRS usually issues refunds within 21 days or less after processing begins on a return. The agency began accepting returns Jan. 19 this year.

“These increased security screenings are invisible to most taxpayers,” Koskinen continued. “But we want people to be aware we are taking additional steps to protect taxpayers from identity theft, and that sometimes means the real taxpayers face a slight delay in their refunds. As we continue improving our processes and working with the states and the tax industry, we will stop more fraud while also fine-tuning our tools to reduce the number of innocent taxpayers who might see a refund delay. “

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