Latest news with #AdditionalChildTaxCredit
Hindustan Times
06-05-2025
- Business
- Hindustan Times
IRS tax refund update: Who's getting their check this week?
As the US tax season enters its final stretch, millions of Americans are closely watching their mailboxes and bank accounts for one reason: tax refunds. For those who filed their federal income tax returns in late April, the Internal Revenue Service (IRS) is expected to issue a new round of payments this week, as reported by New York Tax Concept. Also read: IRS tax refund schedule: Will your deposit arrive this week? Find out Between May 5 and May 11, many eligible taxpayers could see their refunds land in their accounts—especially those who filed electronically and requested direct deposit, as reported by Marca. Refunds expected this week are largely tied to returns processed around the week of April 14–20. Based on the standard IRS processing timeline, which typically runs up to 21 days for e-filed returns with no errors, individuals in that filing window fall directly within the May 5–11 payout range. *Filed electronically *Selected direct deposit *Submitted returns free of errors or unusual claims are the most likely to receive refunds this week. In many cases, direct deposits begin appearing in bank accounts on Mondays or Tuesdays, with physical checks arriving slightly later for those who opted for mail delivery, as reported by New York Tax Concept. Not all taxpayers will see their refunds arrive within this window. Several factors may result in delays: *Errors or omissions in tax returns (such as incorrect banking details or mismatched personal information) *Paper filings, which typically take 6 to 8 weeks or longer to process *Claims involving credits like the Earned Income Tax Credit (EITC) or Additional Child Tax Credit (ACTC), which require additional verification *Outstanding federal debts, such as unpaid student loans or tax liabilities, which may result in partial or full refund offsets The IRS encourages taxpayers to use the 'Where's My Refund?' tool on its official website or via the IRS2Go mobile app. Updates are provided once the return is received, the refund is approved, and the payment is sent. For the most accurate results, users need their Social Security number, filing status, and exact refund amount, as reported by Marca. For those still awaiting refunds or planning ahead for next year, here are some useful practices: File early: Submitting returns as soon as possible shortens wait times. Double-check entries: Ensuring all personal and financial details are accurate helps avoid red flags during processing. Choose e-filing and direct deposit: These options consistently provide the fastest turnaround for refunds. Also read: CBDT to closely monitor top taxpayers, crack down on bogus deductions The week of May 5 to 11 marks a significant payout period in the 2025 IRS refund calendar, especially for taxpayers who filed in mid-to-late April. While many can expect refunds this week, others may face delays due to various filing or processing issues. Staying informed and using official IRS tracking tools remain the best ways to monitor refund status and avoid unnecessary worry during tax season.
Forbes
29-04-2025
- Business
- Forbes
Additional Child Tax Credit, Americans Abroad: IRS Is Watching Closely
Americans living abroad claiming the ACTC face complex tax rules. IRS audits of expat filings ... More claiming the ACTC are on the rise. IRS Is educating its agents about what to look for to catch invalid claims. The Additional Child Tax Credit can provide taxpayers up to $1,700 per qualifying child in 2025 as a refundable credit. The ACTC not only reduces the amount of tax owed but can also result in a refund from the IRS if the credit exceeds the tax liability. Non-refundable credits can only reduce a taxpayer's tax bill to zero. Refundable credits, like the ACTC, can generate a payment if the credit is greater than the amount of tax owed. For U.S. citizens and resident aliens living abroad, claiming the ACTC is complicated by Internal Revenue Code Section 911, which governs the Foreign Earned Income and Foreign Housing Exclusions. These are significant benefits for overseas taxpayers. The challenge lies in IRC Section 24(d)(3) governing the ACTC which prohibits taxpayers who elect any exclusion under Section 911 for a taxable year from claiming the ACTC. The IRS is intensifying scrutiny of expat filings claiming the ACTC due to frequent errors and overpayments. Recently, the IRS issued an International Practice Unit specifically addressing the ACTC for U.S. persons abroad. The IPU educates IRS agents on identifying improper ACTC claims, including those involving Section 911 exclusions. The ACTC is the refundable portion of the Child Tax Credit for each child under the age of 17. Among other requirements, eligibility requires a U.S. citizen or resident alien child with a valid Social Security Number issued before the filing deadline, with the taxpayer providing at least half the child's financial support. The CTC phases out at higher modified adjusted gross income levels, and the ACTC requires at least $2,500 in earned income not excluded from U.S. taxation. The ACTC equals 15% of earnings that exceed the $2,500 refundability threshold, up to the maximum amount of the refundable credit ($1,700 per child in 2025). Due to the phase out limits, the ACTC won't help taxpayers with high income levels. Nonethless, it can provide a significant financial boost to other taxpayers, especially those with several children. Assuming certain qualification tests are met, IRC Section 911 provides valuable benefits to taxpayers living and working abroad. It allows expats to exclude up to $130,000 of foreign-earned income in 2025. In addition, it permits the exclusion of certain employer-provided housing costs. The law governing the ACTC states that the ACTC 'shall not apply to any taxpayer for any taxable year if such taxpayer elects to exclude any amount from gross income under section 911 for such taxable year.' Thus, because of the prohibition set out in section 24(d)(3), electing either the FEIE or Foreign Housing Exclusion, or both, will completely disqualify the taxpayer from claiming the ACTC. To claim the ACTC, expats must forgo Section 911 exclusions entirely. Many will be able to use the Foreign Tax Credit, instead. The FTC offsets the taxpayer's U.S. tax liability on a dollar-for-dollar basis with foreign taxes paid. This keeps the foreign earned income taxable and preserves eligibility for the ACTC. The FTC will not be helpful for taxpayers residing in a foreign country that does not impose an income tax or equivalent (e.g., the United Arab Emirates, or the Kingdom of Saudi Arabia). Making the choice requires careful planning. Once a taxpayer elects to use the FEIE or foreign housing exclusion, that choice remains effective for all later years unless the taxpayer revokes it. This means the taxpayer must continue to make the same choice each subsequent year or he will be considered to have revoked the Section 911 exclusion election. Switching to the FTC after having made the Section 911 election will be treated as an implied revocation. After a revocation, a taxpayer cannot re-elect use of any Section 911 exclusions for a five- year period without first obtaining IRS approval. The IRS has heightened oversight of expat CTC and ACTC claims due to widespread errors that resulted in many overseas taxpayers receiving improper payments. The recent IRS IPU addressing the CTC and ACTC for U.S. persons abroad outlines what agents should look for including verifying income, whether the claimed credits exceed the limitations, taxpayer residency, whether the taxpayer is a U.S. citizen, proper tax filing status, and child eligibility. The recent release of the IPU serves as a warning that IRS audits of expatriate tax returns claiming CTC and ACTC are likely to increase. IRS audits looking for improper ACTC claims made by taxpayers living overseas will likely be on the ... More rise. In preparation for a possible audit, taxpayers should ensure they have retained necessary tax records. For example, records for at least 3-years regarding income, child support, and foreign tax payments. Given they live and work in a foreign country, such taxpayers most likely have foreign financial accounts. This means they should have records covering 5-years for FBAR-related non-U.S. financial accounts. Increased audit risks are on the horizon; it is best to be well prepared beforehand. In the meantime, taxpayers may wish to consult their tax advisors to make sure of eligibility before claiming the CTC or ACTC. Once confirmed, the overseas taxpayer can file Form 1040 with Schedule 8812 accurately, leveraging the automatic extension to June 15, 2025, for 2024 returns (or October 15 with Form 4868). For Americans living abroad, claiming the ACTC involves navigating a maze of tax rules. Electing any Section 911 exclusion whatsoever prevents access to this valuable credit. Choosing the Foreign Tax Credit instead in order to maintain ACTC eligibility requires careful planning within a complicated global tax landscape. With the IRS' recent release of an International Practice Unit dedicated to educating its agents about the possible invalidity of ACTC claims by U.S. persons living overseas, expats need to proceed very cautiously. The possibility of audits and close regulatory watch means taxpayers must be prepared to demonstrate compliance and should now be reviewing records to make sure all is in order. Get my take on tax matters around the globe. Reach me at vljeker@ Visit my US tax blog It is an invaluable guide in all areas of U.S. international tax. Stay informed of legislative developments, tax reform and all things international tax (including ACTC developments with the IRS). Keep ahead of U.S. tax changes impacting your life, family or business.
The Independent
05-03-2025
- Business
- The Independent
Good news: Latest data shows you might get a bigger tax refund this year
The average tax return in 2025 is up $240 through the week ending February 21, meaning many Americans are getting more money back this year than they might've assumed. More than 42 million returns have already been processed, with the average return coming back around $3,453, according to an analysis by MLive. That's a 7.5 percent increase compared to the same period last year, according to the report. The average direct deposit return is $3,505, which represents an increase of 7.1 percent over 2024. The news comes as a welcome update to a previous prediction that returns would be down this year. According to the analysis, those early reports did not include taxpayers who claimed the Earned Income Tax Credit or the Additional Child Tax Credit. A federal law prohibits Americans claiming those credits from being issued their returns until the middle of February. Now that those returns have been included in the IRS's data, the return amount has increased significantly. According to the analysis, the IRS has issued $102.2 billion in tax returns thus far. One number related to tax returns is down from 2024: the number of individuals who have already filed. So far this year, the IRS has received approximately 42.7 million returns, which is down 4.2 percent from this time last year. Despite that, the total number of returns issued thus far — 29.6 million — is up versus this time last year by 2.3 percent. The data comes at a time when government workers — including IRS workers — are wondering how long they'll have their jobs. The Department of Government Efficiency, under Elon Musk, has been gutting federal agencies and laying off thousands of federal workers. The IRS has not escaped its gaze; as many as 7,000 workers at the agency have been identified as potential targets of layoffs, according to The New York Times. 'There is no possible way there won't be a reduction in service, given the I.R.S. has been trying to hire employees and they haven't even filled all of their openings,' Tom O'Saben, director of tax content and government relations at the National Association of Tax Professionals, told The New York Times. That said, tax experts have advised Americans to follow the same advice they give every year: the earlier you file, the better. Thus far there have been no delays reported. Returns that are filed digitally and request direct deposits are typically processed faster than others.
USA Today
28-02-2025
- Business
- USA Today
IRS delays popular child tax credit refunds for 2024 returns. Here's how to claim them
IRS delays popular child tax credit refunds for 2024 returns. Here's how to claim them Show Caption Hide Caption Tax season begins: New IRS tools aim to simplify filing Tax season has officially begun, and the IRS started accepting returns on Monday. Fox - 32 Chicago The Internal Revenue Service started accepting income-tax returns on Jan. 27, opening the spigots of refund money shortly thereafter. But taxpayers who claimed the Earned Income Tax Credit or the Additional Child Tax Credit will need to wait a bit longer. 'By law, we can't issue EITC or ACTC refunds before mid-February,' the Internal Revenue Service explained on its website, 'This includes your entire refund, not just the part that's related to the credit you claimed on your tax return.' If you claimed one of those credits, plan on a refund showing up by around March 3, the IRS said. Refund money generally will appear faster if you have it directly deposited to a bank account. The delays are designed to protect taxpayers from fraud, reducing the possibility that crooks might get in early and file for refunds in someone else's name. A popular federal tax credit among Americans The EITC is a payment designed to help lower- and moderate-income workers, especially those with kids. Refund amounts vary depending on income and the number of dependent children. On average, taxpayers who claimed this credit received $2,743 in 2023. What qualifies as low income? It varies based on the number of dependent children and other factors. Singles without any children can receive a credit with up to $18,591 in 2024 income or $25,511 for married couples filing jointly. Conversely, singles with three or more kids can qualify with income up to $59,899 or up to $66,819 for married couples. The lower the income and the more kids, the higher the potential credit. The website features an "EITC assistant" calculator to help you determine if you qualify and, if so, for how much of a refund. In Arizona, nearly 516,000 federal tax returns were filed in 2022, the most recent year for which full statistics are available, claimed the EITC, the IRS reported. That was out of about 3.37 million individual federal returns filed by Arizonans that year. More tax tips: Tax deductions and credits may boost your refund. Which ones are available to new filers? Two interconnected tax credits for children The Additional Child Tax Credit, the other benefit for which refunds are being delayed, is connected to the Child Tax Credit. Understanding one requires familiarity with the other. The Child Tax Credit offers tax savings to parents, including those who otherwise might not need to file a tax return. It's worth up to $2,000 for each qualifying child, who generally must be under 17, have lived with you for more than half of the year, provided no more than half of their own financial support and be a U.S. citizen, national or resident alien. Plus, the youngster will need a Social Security number and must be your child, stepchild, eligible foster child or other dependent. The IRS also has an online tax assistant calculator to help determine if you qualify for this benefit, along with other explanatory information on it. Married couples filing a joint return can receive the full credit with income of not more than $400,000, or $200,000 for single parents. Partial credits are available for incomes above those thresholds. But you might not receive the full $2,000-per-child credit if your tax liability for the year is too low. That's where the Additional Child Tax Credit comes in. It enables qualified taxpayers to receive up to $1,700 of that $2,000 amount as a refund. You first apply for the Child Tax Credit to determine eligibility for the additional one. 'Understanding the Additional Child Tax Credit begins with the standard Child Tax Credit,' noted TurboTax. 'If your available Child Tax Credit is greater than your tax liability, the Child Tax Credit can only reduce your tax bill to zero — you don't get any unused portion of the credit back as a refund.' You also can start the process by filling out the Child Tax Credit worksheet contained in the instructions for Form 1040. Roughly 410,000 returns filed by Arizonans in 2022 claimed the fully refundable Child Tax Credit or Additional Child Tax Credit, the IRS said. The nonrefundable child-related credits were claimed nearly twice as often. There are other related benefits, too, such as the Child and Dependent Care Credit, which offers partial subsidies for working parents who must pay helpers for assistance, and the Credit for Other Dependents, for those who can't qualify for the Child Tax Credit. Reach the writer at
Boston Globe
05-02-2025
- Business
- Boston Globe
Tax season is upon us. Here's how to track your refund online.
Tracking your refund Taxes are confusing, so it's no wonder there's an entire industry built on helping people file their forms. But tracking your federal refund is rather simple, thanks to Advertisement On the 'refund' page, you'll see a button that says ' After clicking submit, the tool will show where in the refund process your return stands: 'Return Received,' meaning the IRS has your return and is processing it; 'Refund Approved,' which means the IRS has approved your filing and is preparing to issue it by the date shown on the screen; and 'Refund Sent,' indicating the IRS has sent the refund to your bank or put your check in the mail. The IRS said the refund status will be available 24 hours after you e-file a current-year return, three to four days after you e-file a prior-year return, and four weeks after you file paper return. Taxpayers can also track their refund on the Advertisement Massachusetts also has a refund tracking tool on How long will it take to get your return? The IRS says most refunds are issued in less than 21 days, but there a number of factors that could lead to a longer waiting period. The agency urges taxpayers not to rely on getting their refund by a certain date when considering large purchases or planning out bill payments. The agency says taxpayers who file their returns electronically and choose direct deposit will get their refund faster, and the process is more secure. The Treasury Department's Why your refund might be delayed If it seems you've been waiting too long for your refund, there are a few possibilities of what could be holding things up. One could be that there were errors or blank spaces on your forms that should have been filled in. The IRS says this may require more time review your filing and the agency may ask that file an amended return form. If you filed for a refund under the Earned Income Tax Credit (EITC) or Additional Child Tax Credit (ACTC), federal law does not allow those refunds to be released until mid-February, according to the IRS. The 'check your refund' tool should show an updated status by Feb. 22 for most early EITC and ACTC filers and refunds should appear in the filer's bank account by March 3 if there were no other issues, the agency said. Advertisement A more concerning possibility is your identity may have been stolen or you are the victim of tax fraud. The IRS has Nick Stoico can be reached at
