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Related: Editorials & Other Articles, Issue Forums, Alliance Forums, Region ForumsHope you aren't counting on getting a tax refund this winter
Millions of low-income households rely on the Earned Income Tax Credit to help them get through the winter. Too bad most IRS workers are furloughed.
With the holidays behind them, millions of Americans are putting a new priority on the calendar: getting caught up on the heating bill. Since most states have laws prohibiting utilities from disconnecting the gas during the winter, households struggling to juggle their expenses sometimes let this one lapse. When the new year arrives, so does help, in the form of the Earned Income Tax Credit.
Families rely on the Earned Income Tax Credit (EITC) for a vital infusion of cash after the holiday season. More than 25 million low- and moderate-income tax filers claimed the EITC last yeara total of 18 percent of all tax returns. In 2018, these tax filers saw an average return of $2,488which helps to explain why households claiming the EITC (or the refundable Child Tax Credit) are among the earliest households to file their taxes every year.
This year may be different, thanks to the ongoing federal government shutdown. While the Trump administration has pledged that the Internal Revenue Service will still issue tax refunds, recent changes to the tax code will make that promise difficult to keep, especially with regard to these critical refunds. As the shutdown stretches on, people who depend on the EITC for relief may face serious hardship.
Although the federal government has indicated they want to send out refunds on time, its questionable to me whether thats a realistic goal, says Elaine Maag, a senior research associate in the UrbanBrookings Tax Policy Center at the Urban Institute.
Changes to the tax code passed as part of the Protecting Americans from Tax Hikes (PATH) Act of 2015 require the IRS to delay issuing tax refunds for filers who claim either the EITC or the Additional Child Tax Credit (ACTC). This delay enables the IRS to verify wage data for families filing EITC or ACTC refunds. Maag says that this delay represents a burden for low-income families with children, since the income test falls on them alone, forcing them to stretch their budgets.
https://www.msn.com/en-us/money/taxes/hope-you-arent-counting-on-getting-a-tax-refund-this-winter/ar-BBSiuce?li=BBnb7Kz
FirstLight
(13,362 posts)that would be my household...
2naSalit
(86,671 posts)Next winter would be the best we could hope for at the moment.
Freddie
(9,269 posts)Thanks to the new tax tables. That bigger paycheck is going to come back and bite a lot of people in the ass.
Wellstone ruled
(34,661 posts)Those of us who live on1099's,mandatory dismemberment from IRA's or 401's ,or Pension pay outs,are going to get clobbered .
Remember Romney's 47%,well welcome to the largest Tax increase in History.