IRS tax refund delay will mainly impact low income families - WMBFNews.com, Myrtle Beach/Florence SC, Weather

IRS tax refund delay will mainly impact low income families

Source: WMBF News Source: WMBF News

HORRY COUNTY, SC (WMBF) - With the arrival of tax season, many are looking forward to receiving their refunds.

Some, however, may have to wait a little longer before they arrive.

This is due to the Path Act, which was passed in 2015 and goes into effect this year. It includes more than 50 different tax breaks for people and businesses, yet could cause the Internal Revenue Service to delay millions of returns if filers receive certain credits.

Samantha Slapnik, who runs two Liberty Tax locations, said those who are most affected are the ones who can least afford it.

"The biggest piece that people are going to see an effect from this year will be a delay on refunds for anyone with earned income credit, and additional child tax credit on their tax returns," Slapnik said. 

He added this time of year along the Grand Strand is tough, as industries have laid off employees and the peak season has not begun for the hospitality industry.

"So there's people who are out of work, they need the money and now they're going to have to wait a couple of extra weeks," Slapnik said.

According to the Path Act, the IRS cannot distribute any refunds before Feb. 15 for anyone who falls under the earned income category. The reason is they have to check for fraud.

"Unfortunately, there's a lot of fraud when it come to the earned income credit because it's a very large credit, up to $7,000 for some families," Slapnik said.

While this is the busy season for Slapnik and other tax services, other industries like car dealerships rely on tax refunds too.

Alan Moss runs Car City in Conway and said tax refunds help stimulate the economy, but delaying them could put a kink in the chain.

"This gets the year started for the car business. Tax season is when everyone comes out. They have money; they've got a good down payment. They want to buy a newer, nicer car," Moss said. "It mostly affects our customers, the people that don't have the money, that have lower incomes." 

The Path Act will have an upside for some. College students and certain businesses will be eligible for tax credits, as well as a tax-free IRA distribution for senior citizens.

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