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Tax refund delays could sting working poor

Annie Baxter May 13, 2016
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Refund delays could disrupt workers’ personal budgets. Scott Olson/Getty Images

Tax refund delays could sting working poor

Annie Baxter May 13, 2016
Refund delays could disrupt workers’ personal budgets. Scott Olson/Getty Images
HTML EMBED:
COPY

Some low- and moderate-income workers could find themselves waiting longer next year to get their tax refunds.

A new law aimed at deterring tax fraud gives the IRS more time to review refund claims from recipients of the earned-income tax credit and child tax credit. Those refunds would not go out before Feb. 15 of next year, potentially weeks later than when people got them this year. 

John Wancheck, with the think tank the Center on Budget and Policy Priorities, estimates that by Feb. 12 of this year, about 8 million earned-income tax credit recipients already had their refunds in hand. 

He said the refund delays next year could disrupt those workers’ personal budgets. 

“It can be a few thousand dollars coming to them,” he said. 

Families getting the earned-income tax credit tend to use their refunds quickly on things like car repairs or paying down debt, according to Diane Whitmore Schanzenbach, a social policy expert at Northwestern University. 

“Maybe they’re in arrears with their landlords, and so they’ve struck deals and said, ‘As this comes in, I’ll give it to you,’” she said. 

Schanzenbach said she hopes recipients of those tax credits have time to plan for the delays coming next year.

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