The questions related to qualifying children have been removed from Form 8867 and are included on a worksheet.Form has been renamed to be “Paid Preparers Due Diligence Checklist”.The PATH Act expands the EITC due diligence requirements under Code Section 6695 (including the penalty, which will rise for each claimed credit to $510 per credit and per child) to include the Child Tax Credit and the American Opportunity Education Credit beginning with 2016 individual federal tax returns.Īs a result of the expansion of the due diligence requirements the Form 8867 will be modified as follows: This provision only affects when the refund will be released.Ĭhild Tax Credit – Taxpayers who elect to exclude from gross income any amount of foreign earned income or foreign housing costs may not claim the refundable portion of the Child Tax Credit.Įducation Credit and Tuition Fees Deduction – Beginning with Tax Year 2016, an individual must receive a Form 1098-T in order to claim an education credit (American Opportunity or Lifetime Learning) or the Tuition and Fees Deduction. The IRS will begin accepting and processing tax returns once the filing season begins. However, t axpayers should file as they normally do, and tax return preparers should also submit returns as they normally do. Under the new law, the IRS cannot release the part of the refund that is not associated with the EITC and ACTC. The IRS will hold the entire refund until February 15. The stated reason for this is to allow additional time to help prevent revenue lost due to identity theft and refund fraud related to fabricated wages and withholdings. To comply with the law, the IRS will hold the refunds on EITC and ACTC-related returns until Feb. 15 if the taxpayer claimed the Earned Income Tax Credit or Additional Child Tax Credit on the return. Section 201 of this new law mandates that no credit or refund for an overpayment for a taxable year shall be made to a taxpayer before Feb.

18, 2015, and made several changes affecting the processing of tax returns where the taxpayer claims the Earned Income Tax Credit and/or the Additional Child Tax Credit. The Protecting Americans from Tax Hikes Act of 2015 (PATH Act) was enacted Dec. Refunds for EIC or Additional Child Tax Credit Held Until February 15 The Start Date for Electronic Filing for 2016 Individual Tax Returns will be Jan.

2016 extension form for 1120s