Will your IRS refund be frozen?
The IRS wants to reduce fraud this tax season, so it will freeze all of your refund until February 15 if you are requesting certain credits such as the Earned Income Tax Credit (EITC) and the Additional Child Tax Credit (ACTC) which are refundable credits that are refundable if you do not owe any tax. You could file your tax return and request these credits even if you are not required to file a tax return. The reason that they will freeze your refund when you ask for these credits is because the IRS wants to confirm for example, the reported earned income with your W-2 or 1099-MISC (for contractors) to verify that you qualify for the credits you are requesting. This is why for this tax season the federal government changed the requirement for employers to turn in their W-2 forms and certain 1099 forms which include 1099-MISC for contractors to the IRS by January 31, 2017.
The EITC is a credit given for you or your children that meet the requirements and is based on earned income. If you have 3 (or more) children, the maximum credit is $6,269; for 2 children, it is $5,572; and for 1 child, $3,373. If you don’t have qualifying children, the maximum credit is $506.
The ACTC is a credit that doesn’t place a limit on the number of qualifying children you may have and has a maximum of $1,000 per child. People with ITINs can request this credit.
Ask your VITA preparer or other reliable tax preparer if you think you qualify. Do you have problems with the IRS? Legal Aid of Western Missouri’s Low Income Taxpayer Clinic (816-474-6750) could offer free help if you qualify for our services.
