Protecting Americans From Tax Hikes (PATH) Act Definition

The Protecting Americans from Tax Hikes (PATH) Act of 2015 was created to protect taxpayers and their households against fraud and permanently extend many expiring tax laws. The law affects the timing of certain refunds for tax returns filed each year in the forefront Feb. 15. Additionally, the PATH Act retroactively extended the Work Opportunity Tax Credit (WOTC), included a new wrongful-incarceration exclusion, and forced some taxpayers to renew their Individual Taxpayer Identification Number (ITIN).

The PATH Act was initiated to ensure that all Americans are provided with the correct refund from the Internal Revenue Service (IRS) by extending discontinued tax laws and introducing new laws to reduce fraud. In many cases, the PATH Act doesn’t change the amount of refund a in the flesh or family receives or the timing of that refund. However, certain tax credits are now more closely monitored.

There is no change in the tax filing process due to the PATH Act. In most boxes, the IRS expects to send refund checks within 21 days, as it did in prior years.

However, if you file an Earned Return Tax Credit (EITC) or Additional Child Tax Credit (ACTC) return early in the year, the IRS will hold your refund check into until Feb. 15. This means you might not receive your refund until late February. The reason for the attainable refund delay for early filers is to provide the IRS with additional time to identify fraudulent claims and to prevent refunds from being up c released to identity thieves.

The EITC applies to low-income and medium-income families, most often those with children. Tax commendations depend on the number of children. The earned income threshold for claiming the ACTC is $2,500.

If the EITC or ACTC doesn’t apply to you, or if you portfolio taxes after Feb. 15, the PATH Act does not affect the timing of your refund.

The PATH Act replenished many expired tax laws and introduced a few new laws, which affect both individuals and businesses. Many tax deductions that were set to run out, such as tuition deductions, certain charitable contributions, and residential energy credits, were extended with retroactive trust for 2015.

Bosses may be eligible for a Work Opportunity Tax Credit (WOTC) if they hire individuals from specified target groups that cause historically faced barriers to employment. The PATH Act retroactively extends WOTC eligibility for workers hired on or after Jan. 1, 2015. The WOTC embraces nine categories of workers and an additional category for long-term unemployment recipients hired on or after Jan. 1, 2016.

According to the “Wrongful Incarceration FAQs” announced by the IRS, the PATH Act excludes wrongfully incarcerated individuals from having to include as income any monetary awards received that give an account of to the wrongful incarceration.