IRS have been carefully examing returns with EITC claims, partly because the credit is a common target for fraud. Less than 5 percent of filings claiming the EITC have been delayed, IRS spokesman Terry Lemons told Reuters.
But those taxpayers will soon be able to track their refunds on the IRS Where’s My Refund web page, he said.
Walmart, the top U.S. retailer, said in its earnings report on Thursday that delayed tax refunds has hurt sales in the early part during this quarter.
“… February sales started slower than planned, due in large part, to the delay in income tax refunds,” said Bill Simon, Walmart U.S. president and chief executive officer, in a statement Thursday. “We began seeing increased tax refund check activity late last week in our stores, resulting in a more normalized weekly sales pattern for this time of the year.”
Walmart report that it cashed about $1.7 billion in tax return checks at its U.S. stores so far this year. At this point a year ago, that amount was about $3 billion.
The tax filing season this year kicked off Jan. 30, a few days later than normal, because Congress was late in enacting the “fiscal cliff” legislation that extended many tax breaks for most Americans.
The EITC-related delays also contributed to the lower level of check cashing at Walmart, tax preparers told Reuters.
Workers, those self-employed and farmers who earned $50,270 or less last year could receive larger refunds if they qualify for the EITC.
That could mean up to $475 in EITC for people without children, and a maximum credit of up to $5,891 for those with three or more qualifying children.
Unlike most deductions and credits, the EITC is refundable. In other words, those eligible may get a refund from the IRS even if they owe no tax.
Although an estimated four out of five eligible workers and families get the credit, one in five still miss out on it, either because they don’t claim it when filing, or don’t file a tax return at all, the IRS said in a press release last month.
“A large part of the nation sees major changes every year with their tax situation,” said IRS Acting Commissioner Steven T. Miller in a statement. “This year, millions of workers could qualify for EITC for the first time, and the IRS urges them not to overlook this valuable credit.”