what is the protecting americans from tax hikes path act 
the protecting americans from tax hikes path act of 2015 was an obama era law that expanded or renewed several tax credits for individuals families and businesses while implementing measures to prevent fraudulent claims for those credits the act remains in force the act primarily affects people who are eligible to receive certain tax credits the path act also renewed about 50 temporary tax breaks for individuals and businesses that had passed their original expiration dates 5understanding the path actthe path act focused on several tax credits for individuals families and businesses it extended some credits permanently and expanded eligibility for others a tax credit in general is more valuable to the taxpayer than a tax deduction a tax deduction merely reduces the person s taxable income a tax credit reduces the amount of taxes owed dollar for dollar 7a tax credit may also be refundable or partially refundable in that case a low income taxpayer might owe little or no taxes and receive a check from the irs for some or all of the credit 7special considerationstax credits are particularly vulnerable to fraud by taxpayers seeking to score credits they aren t eligible for and by con artists preying upon eligible taxpayers this was notably through the child tax credit and the earned income credit the child tax credit ctc program which was substantially expanded to relieve american families of some of the financial burden caused by the covid 19 pandemic delivered payments of up to 300 per month per child to taxpayers below certain income levels through 2021 8the ctc reverted back to pre pandemic levels in 2022 and is adjusted slightly for inflation annually eligible taxpayers automatically received those payments because the irs had the information it needed to identify them but those whose incomes were so low that they didn t have to file were required to sign up for the credit online 9and that fact opened up an opportunity for con artists masquerading as irs agents they approached people by text email phone and social media posing as government representatives to trick personal information out of the unwitting 10the other target for fraud of course was the irs itself tax filers could commit fraud by underreporting their income or inventing dependents to qualify for the credit a second opportunity for attempting to defraud the irs occurred through the earned income tax credit eitc this credit worth 560 to 6 935 a year is available to low and moderate income individuals with larger amounts credited to families with children 11an attempted fraud can occur when someone files a tax return that falsifies the person s earned income the number of children in the family or both the irs warns that people eligible for the child tax credit are being bombarded with calls texts email messages and social media posts from scam artists seeking to steal their money the agency warns taxpayers not to disclose personal or financial information to anyone purporting to be from the irs 10earned income tax credit eitc and additional child tax credit actc there was no change in the tax filing process due to the path act in most cases the irs expects to send refund checks within 21 days 12however if you file an eitc or actc return early in the year the irs will hold your refund check until feb 15 the reason for the delay is to provide the irs with additional time to identify fraudulent claims and to prevent refunds from being paid to identity thieves 13the eitc applies to low income and medium income individuals and families with or without children tax credits depend on the number of children 14 the full actc amount applies to all families that make less than 200 000 400 000 filing jointly and decreases as income increases over that level 15if the eitc or actc doesn t apply to you or if you file taxes after feb 15 the path act does not affect the timing of your refund the eitc has a cap of 560 for childless households in 2022 and 600 in 2023 1416new and extended tax provisions in the path actthe path act renewed many expired tax laws and introduced a few new laws affecting individuals and businesses many tax deductions set to expire such as tuition deductions certain charitable contributions and residential energy credits were extended with retroactive credit 5below are a few path act changes and extensions for individuals and businesses employers may be eligible for a work opportunity tax credit wotc if they hire individuals from specified target groups that have historically faced barriers to employment the path act retroactively extended wotc eligibility to workers hired on or after jan 1 2015 the wotc includes nine categories of workers and an additional category for long term unemployment recipients hired on or after jan 1 2016 1718the path act allows exonerated people to omit any monetary awards related to wrongful incarceration from their reported earned income 19 it also provides wrongfully incarcerated individuals with a window to file refund claims related to restitution or monetary awards including civil damages received and reported in a prior tax year 5 the term path act refund is sometimes applied to this provision the itin is used primarily by taxpayers who cannot obtain a social security number ssn most are foreign citizens who earn income in the u s or from u s sources 20the path act required these taxpayers to get a new itin number if they have one but have not used it in a tax return in the previous three years 3an itin number can be obtained by mailing form w 7 to the irs or visiting an irs office or irs authorized agent 21using an expired itin could result in a refund delay or ineligibility for tax credits tax policy todayas a topic of debate and discussion the path act has long been supplanted by newer legislation some of which deal with the tax credits renewed back in 2015 the fate of the child tax credit is particularly at issue the american rescue plan passed in 2020 to relieve taxpayers harmed economically by the covid 19 pandemic extended the child tax credit to many more american families and increased the size of the payments that provision expired at the end of 2021 22the expanded child tax credit was set to be expanded by the build back better bill which was proposed by president joe biden the house of representatives passed the measure but it stalled in the senate 2324 the expanded credit however didn t appear in the inflation reduction act of 2022 at the federal level which replaced the bbb bill and was signed into law on aug 16 2022 25who qualifies for eitc taxpayers must meet a number of different criteria in order to qualify for the eitc for the 2023 tax year those with no children filing as single head of household or married filing separately face an income limit of 17 640 for those married filing jointly the income limit is 24 210 these income limits increase incrementally depending on the number of qualifying children in addition taxpayers must meet other criteria such as limits on investment income 