Products & Pricing
Online products
CD/download products
Mobile products
Self-employment taxes
Small business taxes
Compare products
TurboTax Advantage
Previous years' products
File an IRS extension
Access my downloads
Tools & Tips
Tax calculators
Tax tips & videos
Track my donations
TurboTax blog
After You File
Track my refund
Check my e-file status
Print my return
Amend my return
Access prior year returns
Go to Turbo
TurboTax Support
Frequently Asked Questions
Expert Services
How TurboTax works
Tax Reform

What is the PATH Act and How May it Impact Your Taxes?

Updated for Tax Year 2017


The deadline to file your taxes is mid-April, but it’s never a bad idea to start prepping early. Some people who file early may notice some changes, though, due to the newly passed Protect Americans from Tax Hikes (PATH) Act, which might affect when you get your tax refund.


The article below is accurate for your 2017 taxes, the one that you file this year by the April 2018 deadline, including a few retroactive changes due to the passing of tax reform. Some tax information below will change for your 2018 taxes, but won’t impact your 2017 taxes. Learn more about tax reform here.


The PATH Act, passed in 2015, includes some changes to the tax law that affect tax filers starting with their 2016 tax returns. It includes changes to two tax credits:

  • The Additional Child Tax Credit (ACTC): The refundable portion of the Child Tax Credit (CTC)
  • The Earned Income Tax Credit (EITC): A means-based refundable tax credit that can be worth more than $6,000

Extended Tax Credits Under the PATH Act

The PATH Act includes some good news for those looking to claim the Additional Child Tax Credit (ACTC). This refundable credit allows eligible families a significant break on their taxes — up to 15% of the income they earned above an initial threshold of $3,000. For example:

  • If a family earned $40,000, the possible 15% refund would be applied to $37,000 (the amount left after the $3,000 threshold).
  • While expiring tax laws would have raised this threshold to $10,000 (potentially lowering the available refund amount), the PATH Act keeps the threshold at $3,000 permanently.

Similarly, the PATH Act permanently increases the income phase-out threshold for the Earned Income Tax Credit (EITC) by $5,000 for those who are married or filing jointly. This means that couples who earned a few thousand dollars more than would have been originally allowed may now be eligible to receive the full EITC for their income bracket.

The Trade-Off: A Delay in Some Tax Refunds

Most people claiming the EITC and ACTC can expect an overall tax refund. However, the PATH Act stipulates that the IRS must withhold refunds for filers who claim these tax credits until February 15.

So if you file before February 15, you're owed a tax refund and you're claiming either the ACTC or EITC, your entire refund will be withheld until at least the February 15 deadline. This delay allows the IRS time to match information from individual tax returns with information on the W-2 forms from employers, which are sent to the IRS by January 31, as a way of preventing identify theft and fraud.

Additional Changes to the EITC

The PATH Act made a few additional changes to the Earned Income Tax Credit (EITC) that may affect your tax returns. While you've always needed a valid Social Security number (SSN) to claim the EITC, the old tax law allowed you to retroactively claim the credit, even for those years when you did not yet have an SSN.

The PATH Act changed this, so you can no longer claim the EITC retroactively for years when you did not have a valid SSN. If you were counting on those retroactive refunds to bolster your tax return, you may be looking at a smaller refund than expected.

Provisions in the PATH Act make it even more important that you ensure you meet the requirements for the EITC before trying to claim it.

  • The IRS now penalizes a taxpayer for erroneously claiming the EITC.
  • The penalty may be based on your tax liability, with the EITC adjustment removed from your return.
  • Mistakenly or erroneously claiming the EITC might also bar you from claiming the credit for up to 10 years in the future.

How Do I Know if I Qualify for the EITC and ACTC?

Consult this Earned Income Credit article for detailed guidelines on whether you qualify to claim the EITC. Remember, with TurboTax, we’ll ask you simple questions to maximize your tax deductions. We’ll automatically apply these credits if you’re eligible and do the calculations for you.

A TurboTax solution for every situation

See which tax prep product is right for you

Looking for more information?

The above article is intended to provide generalized financial information designed to educate a broad segment of the public; it does not give personalized tax, investment, legal, or other business and professional advice. Before taking any action, you should always seek the assistance of a professional who knows your particular situation for advice on taxes, your investments, the law, or any other business and professional matters that affect you and/or your business.

Security is built into everything we do
* Important Offer Details and Disclosures

  • Try for Free/Pay When You File: TurboTax online and mobile pricing is based on your tax situation and varies by product. Absolute Zero $0 federal (1040EZ/1040A) + $0 state offer only available with TurboTax Federal Free Edition; offer may change or end at any time without notice. Actual prices are determined at the time of print or e-file and are subject to change without notice. Savings and price comparisons based on anticipated price increase expected in March. Special discount offers may not be valid for mobile in-app purchases.
  • QuickBooks Self-Employed Offer with TurboTax Self-Employed: File your 2016 TurboTax Self-Employed return between 4/19/17 and 10/16/17 to receive your complimentary subscription to QuickBooks Self-Employed until 10/31/18. Activation by 12/31/17 required. Sign in to QuickBooks Self-Employed via mobile app or at; e-mail address used for activation and sign-in. Offer valid only for new QuickBooks Self-Employed customers. See for price comparison.
    • When you use TurboTax Self-Employed to file your 2017 taxes, you will have the option to renew your QuickBooks Self-Employed subscription. If you do not purchase TurboTax Self-Employed by 10/15/18, you will have the option of renewing your QuickBooks Self-Employed subscription by 10/31/18 for another year at the then-current annual subscription rate. You may cancel your subscription at any time from within the QuickBooks Self-Employed billing section.
  • Pays for itself (TurboTax Self-Employed): Estimates based on deductible business expenses calculated at the self-employment tax income rate (15.3%) for tax year 2016. Actual results will vary based on your tax situation.
  • Anytime, anywhere: Internet access required; standard message and data rates apply to download and use mobile app.
  • Fastest refund possible: Fastest tax refund with e-file and direct deposit; tax refund time frames will vary.
  • Pay for TurboTax out of your federal refund: $34.99 Refund Processing Service fee applies to this payment method. Prices are subject to change without notice.
  • TurboTax Expert Help, Tax Advice and SmartLook: Included with Deluxe, Premier and Self-Employed (via phone or on-screen); not included with Federal Free Edition (but available for purchase with the Plus bundle). SmartLook on-screen help is available on a PC, laptop or the TurboTax mobile app. TurboTax experts provide general advice, customer service and product help; tax advice provided only by credentialed CPAs, enrolled agents and tax attorneys. Feature availability varies by device. State tax advice is free. Service, area of expertise, experience levels, hours of operation and availability vary, and are subject to restriction and change without notice.
  • Tax Return Access, My Docs and My Analysis & Advice features: Access to all tax-related documents we have on file for you is available until you file your 2017 tax return or through 10/31/2018, whichever comes first. Terms and conditions may vary and are subject to change without notice.
  • #1 best-selling tax software: Based on aggregated sales data for all tax year 2015 TurboTax products.
  • Most Popular: TurboTax Deluxe is our most popular product among TurboTax Online users with more complex tax situations.
  • CompleteCheck: Covered under the TurboTax accurate calculations and maximum refund guarantees.
  • #1 rated online tax prep provider: Based on independent comparison of the best online tax software by March 13, 2017.

  • TurboTax CD/Download products: Price includes tax preparation and printing of federal tax returns and free federal e-file of up to 5 federal tax returns. Additional fees apply for e-filing state returns. E-file fees do not apply to New York state returns. Savings and price comparison based on anticipated price increase expected in March. Prices subject to change without notice.
  • Fastest refund possible: Fastest tax refund with e-file and direct deposit; tax refund time frames will vary.
  • Pay for TurboTax out of your federal refund: $34.99 Refund Processing Service fee applies to this payment method. Prices are subject to change without notice. This benefit is available with TurboTax Federal products except TurboTax Business.
  • About our TurboTax Product Experts: Customer service and product support vary by time of year.
  • About our credentialed tax experts: Live tax advice via phone is included with Premier and Home & Business; fees apply for Basic and Deluxe customers. State tax advice is free. Service, experience levels, hours of operation and availability vary, and are subject to restriction and change without notice. Not available for TurboTax Business customers.
  • #1 best-selling tax software: Based on aggregated sales data for all tax year 2015 TurboTax products.
  • Data Import: Imports financial data from participating companies. Quicken and QuickBooks import not available with TurboTax installed on a Mac. Imports from Quicken (2015 and higher) and QuickBooks Desktop (2011 and higher); both Windows only. Quicken import not available for TurboTax Business. Quicken products provided by Quicken Inc., Quicken import subject to change.
Online Software Products
CD/Download Products
Mobile Tax Apps
Help and Support
Tax Tools and Tips
More Products from Intuit