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I processed a return on February 8th with only the $500 ODC (no EITC or ACTC) for a client. The 846 Refund Issued code appeared on their transcript exactly 16 days later, and the deposit hit their account on February 27th. The PATH Act verification period had zero impact on their processing time. The IRS's Modernized e-File (MeF) system handles ODC-only returns through the standard workflow.
According to Internal Revenue Code Β§6402(m) and the Protecting Americans from Tax Hikes Act of 2015, the mandatory holding period applies specifically to returns claiming EITC under Β§32 or ACTC under Β§24(d). The Other Dependent Credit falls under Β§24(h)(4) and is not subject to these heightened verification procedures. Your return should follow standard processing guidelines as outlined in IRM 21.4.1.3 (Processing Time Frames).
If you compare this to other tax situations, HOH with both EITC and CTC is definitely in the "slower processing" category. I've prepared returns for clients in similar situations, and I'm seeing about 30-45 days for processing compared to 14-21 days for simpler returns. This is actually faster than during the COVID years when these same returns were taking 60+ days. The best approach is to create an account on IRS.gov and check your transcript - it will show movement long before TurboTax updates their status.
It's like TurboTax and the IRS are two different planets with occasional radio contact. Your return could be happily processing in IRS land while TurboTax is still showing it as pending in TurboTax world. I was shocked when I learned how disconnected these systems actually are - it's like sending a letter and assuming it's lost because the post office doesn't text you updates. Always check directly with the IRS through their Where's My Refund tool or by getting your transcript. The tax credits you mentioned basically put your return in the "extra scrutiny" pile, which is like getting in the slow lane at airport security.
This is a common issue with the W-4 redesign that occurred a few years ago. The form no longer uses allowances, which has created withholding discrepancies for many taxpayers, especially those with straightforward tax situations like your daughter's. The Marginal Propensity to Withhold (not an official term, but appropriate) is now calculated differently, and many employers' payroll systems haven't fully optimized for these changes. For 2024, she should consider filing a new W-4 with her employer and either specify an additional amount to withhold on Line 4(c) or check the box in Step 2(c) if she has multiple jobs.
This happened to my daughter too! She made $34,000 last year and owed $380 despite having what seemed like appropriate withholding. I'm concerned that this is becoming a pattern where younger workers are being caught off guard by these tax bills. When I helped her fill out a new W-4 for 2024, we added an extra $40 per month in withholding on line 4(c) to prevent this from happening again.
I solved this exact problem for my daughter last year. Would you believe her income was almost identical - $32,900? The issue is the withholding calculations. Have you checked if she's claiming herself as a dependent on her own return? Or could you possibly be claiming her on yours? Because that would create exactly this situation. I had my daughter adjust her W-4 to withhold an additional $30 per paycheck (assuming biweekly pay), and this year she got a $212 refund instead of owing. The withholding system isn't perfect, is it? But with a small adjustment, you can fix it for next year.
I'm in a similar situation - just started my first full-time job on January 15th, 2024, making about $34,000. Based on your experience, should I submit a new W-4 now? I'm worried about owing next year and want to avoid that if possible.
This is exactly what happened to me! The dependent thing is what got me. I was claiming myself as independent on my W-4 but my parents were still claiming me on their taxes (which was correct since they provided over half my support). The IRS doesn't care about the contradiction until tax time, and then you're stuck with the bill. So frustrating that they don't make this clearer to young workers!
Have you considered that this might be related to identity verification? The IRS has significantly increased verification measures for returns with refundable credits like EIC and CTC this year. You might want to proactively check if you need to verify your identity through the IRS Identity Verification Service. Many taxpayers don't realize they need to complete this step until weeks have passed. What if your return is just sitting there waiting for you to verify your identity? Also, have you received any letters from the IRS in the mail? Sometimes they send notices requesting additional information before they'll process your return further, especially with credits like EIC that have higher fraud rates.
I'm wondering if maybe I should go ahead and try to verify my identity even if I haven't received a letter yet? Is that possible? Or would that potentially cause more problems if they haven't actually flagged my return for verification? I'm just not sure if being proactive helps or hurts in this situation...
Thank you for this detailed explanation. I've been through the identity verification process before, and it's definitely worth checking. In my experience, you can attempt to verify through ID.me on the IRS website even if you haven't received a letter. If verification isn't required for your account, the system will simply tell you that no verification is needed at this time. No harm in checking.
Think of the IRS processing system like a massive traffic jam where cars with certain features (like your EIC and CTC) get directed to special lanes for extra inspection. Sometimes your car gets stuck between lanes and doesn't show up on the traffic cameras (WMR). You might want to try the IRS2Go mobile app instead of the website. For some strange reason, sometimes the app shows different information than the website. Also, check your return status very early in the morning (around 3-4am) when their systems are updating - that's when you're most likely to get accurate information before the daily traffic hits their servers.
Ethan Clark
Think of a government shutdown like a snowstorm hitting government services - some roads stay open (essential services) while others close temporarily. Compared to the 2019 shutdown, SNAP benefits now have better contingency plans. Back then, many recipients got February benefits in January with no clear guidance. For taxes, it's similar to how banks operate during holidays - certain automated processes continue while customer service is limited. If you're expecting a refund, electronic filing and direct deposit is like taking the express lane during a traffic jam - still your best option even during a shutdown.
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AstroAce
β’Did you experience any issues with amended returns during previous shutdowns? I filed an amendment last month and I'm wondering if those get completely stopped or just delayed.
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Yuki Kobayashi
β’Thank you for this explanation! Per USDA Regulation 7 CFR 273.10, SNAP benefits must continue during shutdowns, though delivery methods may be modified. This information is extremely helpful for those of us trying to plan ahead before the funding deadline hits next week!
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Carmen Vega
Can someone clarify something about SNAP during shutdowns? If benefits get issued early like last time, do we still get the next month's benefits on schedule or is there a gap? And doesn't the IRS technically operate on user fees rather than appropriated funds anyway? Why would they even shut down?
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Andre Rousseau
β’I've been looking at the USDA.gov and benefits.gov websites, and I'm surprised how complicated this is! Apparently, the IRS is partially funded by user fees but still needs Congressional appropriations for most operations. For SNAP, each shutdown has different contingency plans - sometimes they issue benefits early, sometimes they have enough reserve funding for a month or two. It depends on how long the shutdown lasts and what emergency measures they implement.
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