Americans May Get A Tax Refund Shock This Year

Internal Revenue Service 1040 individual income tax forms for 2021 arranged in Louisville, Kentucky, on April 12, 2022. MUST CREDIT: Bloomberg photo by Luke Sharrett

Millions of U.S. taxpayers could receive a shock when they see their 2023 tax refunds due to the expiration of many pandemic benefits that lawmakers had designed to help Americans weather the crisis, CBS reports.

That means families may see smaller refunds when they file their taxes for the 2022 tax year, said Mark Steber, chief tax information officer at Jackson Hewitt. The average tax refund in 2022 (for the 2021 tax year) was almost $3,200, a 14% jump from the prior year, according to IRS data. The IRS said it will start accepting tax returns on January 23, while the filing deadline is April 18, giving taxpayers an extra three days beyond the typical April 15 deadline to file. That’s because April 15 falls on a Saturday, while Monday, April 17, is Emancipation Day in the District of Columbia.

The benefits that boosted refunds during the pandemic have largely lapsed, ranging from federal stimulus checks to the expanded Child Tax Credit (CTC), Steber noted. Even the IRS is warning taxpayers that checks may be stingier. The tax agency cautioned in a November news release: “Refunds may be smaller in 2023.”

Many of the tax benefits still exist, but under current tax law they have reverted to their smaller, pre-pandemic levels, such as in the case of the CTC, which is credited with lifting millions of children out of poverty. The CTC is reverting to its prior level of $2,000 per child, compared with a pandemic credit that was high as $3,600 per kid.

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Source: Matzav


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