With 2016 being a year of immense political and cultural transference, many taxpayers may have missed the changes in tax laws that could affect their 2017 filing. Although we discussed refund delays related to Earned Income Tax Credits (EITC) and Additional Child Tax Credits (ACTC) in a previous blog, there are more changes taxpayers should be aware of relating to EITC, ACTC, and American Opportunity Education Credits (AOEC). The PATH act approved in 2015 made several changes to these three specific tax credits that went into effect during the 2016 tax year and should be considered when filing in 2017.

ACTC and AOEC Changes:

• Filers cannot submit an amended return(s) to claim ACTC or AOEC for previous years when a qualifying child did not have a SSN or ITIN.
• Educational institutions will be required to report their EIN’s on Form 8863. If missing, returns will be rejected by the IRS.
• If the IRS concludes that a filer has deliberately disregarded the rules of claiming an ACTC or AOEC, they have the legal right to bar the filer from claiming either or both credits for two years.

EITC Changes:

• Filers cannot submit an amended return(s) to claim EITC for years prior that a qualifying child did not have a SSN.
• The EITC is now subject to penalty for incorrect claims on refunds or credits.
• Falsely claimed refunds will now be considered when calculating the underpayment penalty.
• If the IRS determines an individual has erroneously claimed an EITC, they can legally bar them from claiming the credit for 10 years.

The IRS also made changes to Form 8867, expanding it to include due diligence questions related to not only the EITC, but ACTC and AOEC as well. If you have any questions or concerns regarding your 2017 filing as it relates to an Earned Income Tax Credit, Additional Child Tax Credit or American Opportunity Education Credit, please contact your advisor at Brammer and Yeend.