For earned income credit filers, repayments will take place later

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“Delaying repayments will likely cause additional financial hardship for some of these families,” the report notes, as they are used to being able to use their repayments much sooner.

Usually, according to the report, the IRS will start issuing refunds by the end of January. But with the new requirement, even someone who files their return early in tax season – this year it starts on January 23 – won’t receive their refund until mid-February.

As a result, filers who were not aware of the delay may find themselves strapped for cash. “They’re used to getting and expect to get their refunds at some point,” said Chi Chi Wu, an attorney at the National Consumer Law Center.

Due to the delay in repayments, Ms. Wu said, she expects there will be more demand for “tax refund advances,” loans often offered by professional tax chains. As a result, she said, it is very important to choose a preparer carefully to ensure that consumers are not being charged excessive fees or interest.

John Breyault, vice president of public policy for the National Consumers League, said filers claiming the credits should be skeptical of preparers promising to get their refunds sooner. “There is no way around this delay,” he said. “It’s the law.”

What is really on offer is a loan, he said, which may have unfavorable terms.

Most states do not regulate tax preparers. Ms. Wu advises asking preparers what formal training or professional qualifications they have, how long they have been preparing tax returns, and what the specific fees are for tax preparation and for any advance or loan. Additional tips for choosing a preparer are available from the Consumer Federation of America.

Free tax assistance from trained volunteers is available for low and moderate income tax filers through the Volunteer Tax Assistance program; sites typically open around the end of January, and users can search online for a location nearby.


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