What is PATH Act?
The PATH Act (Protecting Americans from Tax Hikes Act of 2015) is federal legislation enacted on December 18, 2015 that prohibits the IRS from releasing refunds for taxpayers claiming Earned Income Tax Credit (EITC) and/or Additional Child Tax Credit (ACTC) prior to February 15.
According to the IRS website the law was enacted to help prevent identity theft, and the entire refund held until at least February 15th.
What's the Impact?
This legislation will create funding delays of up to six weeks or more for an estimated 30M taxpayers filing at the beginning of the tax season. As much as $100B+ in federal tax refunds may be delayed.
On December 9, 2016 the IRS announced that "...many affected taxpayers may not have actual access to their refunds until the week of Feb. 27."
Will my client's refund be delayed?
The PATH Act refund delays only impacts taxpayers that are claiming Earned Income Tax Credit (EITC) and/or Additional Child Tax Credit (ACTC) prior to February 15th. Visit the IRS website for more details about PATH Act refund delays.
What solution can I offer my clients?
Partner with TPG and you can offer taxpayers two great solutions to the challenge created by PATH Act refund delays.
Offer a cash advance with Fast Cash Advance1 - Taxpayers can receive a cash advance within hours of IRS approval of their tax return. Service taxpayers that can’t wait up to 6 weeks for their refund with Fast Cash Advance. Learn More
Help clients hang onto more cash with the Refund Transfer2 - Your clients may have the cash to pay you up-front, but when they learn about the refund delays, many taxpayers will need a way to keep more cash on hand. Paying for tax preparation with their refund helps clients free up cash that they need to pay bills and buy the things they need. Learn More
What help is there for me?
If you can't wait weeks to get paid, you can get paid in days with the free Simply Paid.3 Like a line of credit at the start of tax season, you can get paid upon IRS accepted acknowledgment of your client’s return instead of getting paid upon IRS funding. Get paid in days with Simply Paid, the fee advance from TPG. Learn More
1 Fast Cash Advance is an optional tax-refund related loan provided by First Century Bank, N.A., member FDIC (it is not the actual tax refund) and is available at participating locations. The amount of the loan and applicable interest will be deducted from tax refunds and reduce the amount that is paid directly to the taxpayer from the refund. Fees for other optional products or product features may apply and will be disclosed at the time of application. Tax returns may be filed electronically without applying for this loan. Loans are offered in amounts from $500-$6,000 and are offered both pre–IRS acknowledgment of the tax return and post-IRS acknowledgment of the tax return. All loans have an Annual Percentage Rate (APR) of 35.99%. For example, for a loan of $2,000 with a repayment period of 30 days, the total amount payable in a single payment is $2,059.16 including principal and interest. Not all consumers will qualify for a loan or for the maximum loan amount. Offer and terms subject to change at any time without prior notice.
2 Refund Transfers are deposit products using Civista Bank, Member FDIC, that enable certain deductions from the account to be processed. Refund Transfers are not loans. Tax refund and e-filing are required in order to receive Refund Transfer. Fees apply. Terms and conditions are subject to change without notice. Ask your preparer about other IRS e-file options, some of which are provided at no additional cost.
3 Must opt-in by February 19 to qualify. Advance is subject to approval. Must be enrolled in Standard Refund Transfer program to qualify; all discount programs offered through TPG are excluded from this program. Advances provided by Green Dot Bank, Member FDIC. Check with transmitter for availability.