When Will The Path Act Be Lifted - T-Tees - Your Answers Await, Life's Questions Unraveled

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While most refund payment delays are due to additional IRS security checks and processing, early tax filers who claim the Earned Income Tax Credit (EITC) or Additional Child Tax Credit (ACTC) may experience a payment delay or freeze in their refund due to the PATH Act.

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What is the PATH act?

The Protecting Americans from Tax Hikes (PATH) was enacted by Congress a few years ago and specifies that the IRS must hold the entire refund — even the portion not associated with the the Earned Income Tax Credit (EITC) and Additional Child Tax Credit (ACTC) — until at least three weeks after the IRS starts processing returns. This is normally around mid-February.

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The additional time is to allow the IRS to perform fraud checks and limit refunds from being issued to identity thieves or stop fraudulent claims with fabricated wages, dependents and withholdings.

Because these are fully refundable credits, in that no tax liability is needed to get to get these credits, additional checks are required to ensure they are being paid correctly and for eligible dependents.

Unfortunately due to the backlog of returns and expansion of these credits during the pandemic, the delay in paying PATH impacted refunds has been longer than three weeks.

Also remember, if you don’t get the refundable portion of the CTC, known as the ACTC, you won’t be subject to PATH. This is why some tax payers see their refund early when only eligible for the standard or non-refundable component on the CTC.

According to the PATH Act, the IRS cannot Issue Refunds before mid-February

The following message, or minor variants of it, are what tax filers impacted by PATH delays would generally see when checking their refund status on IRS2Go or WMR. There is no reason to panic if you see this message – it is normal early in the tax season.

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This is the standard IRS message for filers claiming the EITC and/or ACTC (which is different to the standard CTC). See below for how this impacts you and expected dates when impacted refunds will be released this year.

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IRS PATH (w/EIC) Refund Direct Deposit Schedule

The IRS will likely lift the Path ACT and provide refund payment status’ from February 17th, 2024. The first round of PATH held refund payments will likely be sent via direct deposit by February 27th, 2024. I will publish final dates once released by the IRS.

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Initial payments will be for taxpayers who have filed electronically and selected a direct deposit payment method for their refund. Once processing is complete and the refund is approved, these early E-filers can expect to get their refund by within a few days per the table below. See more on PATH processing schedules.

Refunds will be processed in batches – see cycle code in your transcript to get an idea of your release date – so early filers with no other tax return issues will generally see their payments first.

Estimated direct deposit dates are shown in the table below – with payment normally 3 to 5 days after the refund is approved. Paper checks generally take 5 to 7 days longer than direct deposit for IRS approved refunds.

Approved and paid refunds are depicted by code 846 on your transcript or shown in refund sent status on WMR/IRS2Go with your personalized IRS refund issued date. Your transcript may update sooner than WMR for future payment dates. See more in the sections below.

I will update dates through tax season and you can subscribe to get the latest updates.

Approval and Payment can happen anytime during the week

Because everyone has a unique circumstance and various processing adjustments, some people will see updates early and get their direct deposit payments ahead of schedule.

Also remember to try and get your refund payment via Direct Deposit, which the IRS’s recommends as the fastest and most secure method.

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You can leave a comment below this article with your situation and I can try and answer it (or see others in a similar situation). Subscribe below to get the latest updates

You are lucky if early, but don’t be shocked if takes several days after the estimated dates to get your refund. See more in this recent YT video update for PATH updates.

IRS updates on PATH Refund Processing

The IRS has published the following guidance around the PATH act this year per their EIC webpage. But it is important to remember the two key dates around your refund status versus the actual date you get your money.

There are 2 different event dates to keep in mind with the IRS PATH refund freeze. First, is your WMR/IRS2Go refund status, which will update by Feb 17, or sooner.

Your actual refund will be paid or direct deposited by Feb 27th. In some cases your refund payments can come a few days earlier.

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IRS Path Refund Processing and your Transcript

Even after the PATH act lifts, many folks will still see the “IRS is processing your return” message and no additional updates on their transcript. This is normal based on past year experiences. The IRS is continuing to deal with massive tax filing backlogs so PATH is only one reason things are delayed.

Further, just because the PATH act has lifted, don’t assume your return and refund was approved. There could be other processing issues (e.g. your claimed credits didn’t reconcile with IRS records) which may further delay your refund check or direct deposit.

You will see this generally reflected via Tax Code 570 (Return Reconciliation) or TC 203/898 (BFS offset) in transcript.

Past PATH Freeze End and Refund Payment Dates

While the PATH act says returns claiming the EITC or ACTC should be held for up to 3 weeks after the start of the tax season (when IRS accepts returns), IRS backlogs and other complications have meant that the actual release of approved refund has been longer than that.

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The table below shows the expected vs actual dates the PATH act freeze was lifted in past seasons. These are the dates WMR and IRS2Go update with your refund status or payment date (also referred to as PATH Act returns). So expect a similar, albeit improving trend in 2023.

PATH Act Refund Dates

To get the latest updates on the PATH act every season and every year, consider subscribing (free) via the the options below.

Does the PATH ACT Mean my Refund is Approved?

The PATH message does not mean your tax return is done and your tax refund is approved. Your refund could be held for other reasons based on IRS reviews.

Being a “PATHer” simply means the IRS systems have identified you are claiming the (EITC) or the (ACTC) on your tax return, and so further processing and payments related to your refund are held up for the statutory hold period.

The WMR or IRS2Go app uses the PATH Message (see section above) as a placeholder for all tax returns that have claimed these credits until freeze is lifted by the IRS.

Once the PATH LAW lifts your personalized refund status will be shown on the Where’s My Refund? IRS tool and on your IRS transcript (on code 846 refund issued line).

Anybody that files an early tax return, claiming the EITC or ACTC tax credits will be processed as soon as you file them. However any refund that would be due for those returns claiming one or both of these credits will be delayed until the PATH act lifts.

Does the PATH act affect my state tax refund?

Technically no, since this is a federal act directed at the IRS. However given how intertwined your state and federal tax return is when it comes to income, exemptions, deductions and dependents it is rare to see them filed separately.

It is however common that if both your state and federal are filed accurately, your state refund could be approved and paid well before your federal refund from the IRS.

If there are discrepancies in the future with your federal return, your state tax agency will send you a notice seeking further explanation and likely recoup any underpayments in subsequent years. If they owe you more, you’ll get a check back for the additional refund.

State agencies may have different rules and guidance so I recommend checking their websites for official guidance.

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