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Tax filers claiming earned income tax credit to face refund delay this year

McClatchy-Tribune Information Services

Jan. 16, 2017


PITTSBURGH — Low-income families who typically receive the federal earned income tax credit — and a tax refund of several thousand dollars — will have to wait longer than usual this year to receive those funds, officials say.

Due to a law that was enacted at the end of 2015, the IRS will hold the refunds of taxpayers claiming the EITC until Feb. 15, and is telling those who claim the credit not to expect a refund until the week of Feb. 27.

"This allows additional time to help prevent revenue lost due to identity theft and refund fraud related to fabricated wages and withholdings. The IRS will hold the entire refund," according to a statement on the agency’s website.

The tax credit is available to working families who have yearly incomes below about $39,300 to $53,500 (the exact amount depends on their marital status and number of dependent children).

The IRS says it still expects to issue most refunds in less than 21 days, after Feb. 15.

In the Pittsburgh area, the United Way of Southwestern Pennsylvania and partner agencies assisted more than 10,000 households in the region file their taxes for free and access the earned income tax credit and other related credits such as the child tax credit, said Kiandra Foster, program manager, United For Families at United Way of Southwestern Pennsylvania.

Allowing low-income working families the opportunity to file their taxes for free and letting them know about tax credits they are eligible for ensure "that they are getting every dollar back that they can," Foster said, as they avoid going to a paid tax preparer.

Pittsburgh’s Just Harvest, one of the largest tax sites in the United Way’s coalition, is sending out postcards to its previous tax clients to let them know about the delay, said Kristie Weiland Stagno, tax campaign coordinator for Just Harvest.

"It is going to be a hardship for people," she said. "People come in here already knowing where they need to spend their refund. They owe rent, they owe utilities, they have bills."

At the Human Services Center Corporation outside Pittsburgh, the nonprofit makes a point of also assisting tax filers with other issues, such as referrals for health insurance coverage, financial counseling, credit counseling and rental assistance

"We’re not just doing a tax return, but really helping people to improve their financial stability," said Arwen Lavengood Davis, operations and special projects director.

The tax credit is considered by many researchers and anti-poverty advocates to be an effective anti-poverty program. It began in the 1970s and tends to enjoy bipartisan support because it both encourages work and assists low-income workers, said Chuck Marr, director of federal tax policy at Center on Budget and Policy Priorities.

"It is a major benefit to working class people," Marr said.

During the 2015 tax year, the average EITC was $3,186 for a family with children, according to the Center.