Why does the IRS delay refunds for people with Earned Income Credit?


I’ve seen articles and headlines mentioning that the IRS holds tax refunds for those with Earned Income Credit until mid february but have never got an explanation as to why.

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To my understanding, its a measure to try to prevent malicious actors from sending in a falsified return (stealing a victim’s identity) to claim those large valued credits for themselves.

Delaying such returns would identify situations where multiple returns are filed for the same person before any payments were made.

The Protecting Americans from Tax Hikes Act (2015) was the law that specified that delay period.

The IRS holds tax refunds for those claiming the Earned Income Credit until mid-February in order to help combat fraud and ensure that the credit is going to those who are eligible to receive it. By holding the refunds until mid-February, the IRS can use additional verification and analysis processes to ensure that the credit is going to the right people. This extra time also allows the IRS to detect any discrepancies or inaccuracies in the tax return before the refund is issued.