The Protecting Americans from Tax Hikes Act of 2015 (PATH Act) was enacted December 18, 2015, and  included elements designed to protect Americans against identity theft and tax fraud. Issuers of W-2s and 1099-MISC and 1099-Rs are now required to submit forms to the Social Security Administration by January 31 of the year following the end of the tax year, generally January 31 of the next year. It also gave the IRS more time to review returns with specific tax credits, like the Earned Income Tax Credit (EITC) and the Additional Child Tax Credit (ACTC) , and to compare Forms W2 and 1099 from the payers against the individual tax return.

 

Additional Changes for the EITC

The PATH Act contained provisions that will affect individuals who claim EITC beginning with the 2016 tax year:

  • You can no longer file an amended return to claim EITC for prior years that a taxpayer, spouse, or qualifying child did not have a Social Security Number (SSN).
  • Incorrectly claimed refundable credits will now be taken into account when determining the underpayment penalty.
EITC Related Penalties Apply to CTC/ACTC and the American Opportunity Tax Credit (AOTC) 
The PATH Act contained provisions that will affect returns with CTC/ACTC and AOTC:
  • You can not file an amended return to claim CTC/ACTC/AOTC for prior years that a taxpayer, spouse, or qualifying child did not have an Individual Tax Identification Number (ITIN).
  • The CTC/ACTC/AOTC are now subject to the penalty for erroneous claims for refunds and credits, similar to EITC
  • Incorrectly claimed refundable credits will now be taken into account when determining the underpayment penalty.
  • The IRS can bar a taxpayer from claiming the CTC/ACTC and AOTC for two years if a claim is found to be negligent and ten years of a claim is found to be fraudulent.
New Refund Timing for EITC and CTC/ACTC Returns

The PATH ACT allowed the IRS additional time to review returns claiming the EITC and ACTC which automatically delays tax refunds that contain those credits. Refunds including EITC and CTC/ACTC will be released mid-February for all tax years after 2015.  

Getting an Early Tax Refund

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