"Encryption of the data may slow down the process by which the stolen records are converted into cash through identity theft and fraudulent accounts, although that will also depend on the strength of the encryption," Cobb said.

Cobb pointed out that this breach came only a couple of months before people can start filing their income tax returns.

"Fraudulent electronic claims for refunds are a huge problem for the Internal Revenue Service (IRS) as criminals can easily make fake versions of the income tax withholding form known as W-2, showing that the employer withheld more tax than was owed," Cobb said. "Employers often dont inform the IRS of taxes withheld until several months into the New Year."