More than 20 million Americans could see tax refunds delayed due to a specific tax credit claim.
Those who claimed the Earned Income Tax Credit must wait until at least March 2 to get their refund, and if they choose to receive it as a check instead of as direct deposit, it could take even longer to arrive.
Why It Matters
The GOP’s One Big Beautiful Bill Act ushered in a wave of new tax rules, and on average, Americans will receive $1,000 more in tax refunds.
However, specific credits like the Earned Income Tax Credit could cause a delay in actually getting a refund.
What To Know
Taxpayers filing for either the Earned Income Tax Credit or the Additional Child Tax Credit will have to wait until March 2 at the earliest to receive refunds from the IRS.
“Both the Earned Income Tax Credit and the Additional Child Tax Credit could delay your federal tax return if you’re an earlier filer this year,” Alex Beene, a financial literacy instructor for the University of Tennessee at Martin, told Newsweek.
“The IRS requires additional time to process these credits, mainly to verify what you reported, check for any errors, and also prevent potential fraud. The result is a hold for earlier filers that doesn’t lift until mid-February, meaning the earliest your refund will be distributed is March 2 or after.”
In the 2024 tax year, 23.5 million workers and families received the EITC, and roughly $68.5 billion was paid out.
On average, the EITC was $2,916 per household.
Tax Refund Status: How to Check
By February 21, Americans will be able to see the projected deposit dates for EITC and ACTC refund filers on the IRS Where’s My Refund tool.
This tool is available on the IRS website and updates every day. As long as a user has their Social Security number, filing status and refund amount, they should be able to see one of three statuses: return received, refund approved, and refund sent.
If approved, they should also see an expected mailing date.
Who Is Eligible for the Earned Income Tax Credit?
The Earned Income Tax Credit is a refundable tax credit designed to help low- to moderate-income workers. A filer must have earned income to qualify.
Specifically, income must be under the IRS limits. The more children a filer has, the higher the cutoff.
If a filer does not have qualifying children, they also must be between 25 and 64 years old and not be a full-time student.
Who Is Eligible for the Additional Child Tax Credit
The ACTC is the refundable portion of the Child Tax Credit. It’s for people who don’t owe enough taxes to get the full Child Tax Credit but still qualify for part of it as a refund.
Very low earners may not qualify even if they have a child, but moderate earners often do.
Low- to moderate-income parents, single parents and families with multiple children typically are eligible.
What People Are Saying
Alex Beene, a financial literacy instructor for the University of Tennessee at Martin, told Newsweek: “If you qualify for one of these credits, it’s important to remember the hold pertains to your entire federal tax refund amount and not just the amount of the credit, meaning the RIS will not send you a refund until the credits have been cleared.”
Kevin Thompson, the CEO of 9i Capital Group and the host of the 9innings podcast, told Newsweek: “Nearly 20 million Americans could see their tax refunds delayed this year due to the Earned Income Tax Credit (EITC). The hold is intended to prevent fraudulent claims, as more than 23 million workers applied for the credit last year. This verification process allows the IRS to confirm reported income before releasing funds instead of trying to recover improper payments later.”
What Happens Next
The delay may not be expected for millions of taxpayers, but ultimately should not affect the refund amount deposited into accounts.
“For many, the delay may come as a surprise, especially for those expecting an early refund,” Thompson said. “Still, this is a refundable credit, meaning you should claim it even if you owe no taxes. If you qualify, you can receive money back even with zero tax liability.”
