The Protecting Americans from Tax Hikes Act of 2015 (the PATH Act), was enacted on December 18, 2015. The PATH Act contains several changes to the tax law that affect individuals, families, businesses and help safeguard against tax fraud.
Most people claiming the EITC and ACTC can expect an overall tax refund. However, the PATH Act stipulates that the IRS must withhold refunds for filers who claim these tax credits until February 15.
So if you file before February 15, you’re owed a tax refund and you’re claiming either the ACTC and/or EITC, your entire refund will be withheld until at least the February 15 deadline. This delay allows the IRS time to match information from individual tax returns with information on the W-2 forms from employers, which are sent to the IRS by January 31, as a way of preventing identify theft and fraud.
The IRS will hold the entire refund. Under the new law, the IRS cannot release the part of the refund that is not associated with the EITC and ACTC.