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IRS: Tax refunds could drop this year amid ending pandemic-era policies

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WHAT YOU NEED TO KNOW:


  • This year’s tax refunds could be significantly lower as several pandemic-era policies end.
  • The end of several policies, such as the enhanced child tax credit and Child and Dependent Care Credit, could heavily impact parents in particular.
  • Returns are due on April 18 while those affected by the storm in Alabama, California, and Georgia have until May 15.

The IRS warned that the expiry of a few significant pandemic-era policies this year could result in smaller tax refunds.

The drop in tax refunds could impact people depending on these checks for debt reduction or bills payment.

In 2022, the average tax refund increased by 7.5% from the previous year to $3,039. But this year’s tax refunds could be significantly lower as several pandemic-era policies end.

Parents who received $3,600 per child due to the enhanced child tax credit will now get $2,000. Working parents who used to get $8,000 due to the Child and Dependent Care Credit will now get a maximum of $2,100. For taxpayers with no children, the Earned Income Tax Credit is also lower than last year.

Taxpayers were previously able to take a $600 deduction for charitable donations even for standard deductions, but now, only those who itemize can deduct charitable payments.

Those who purchased an electric vehicle on or after August 16, 2022, could qualify for a $7,500 tax credit. However, the vehicle must have been assembled in North America.

The IRS have started accepting tax returns on Monday, but experts caution to pull together all relevant forms such as the 1099s and W-2s before rushing to file.

Since April 15 falls on a weekend this year and April 16-17 is Emancipation Day holiday in Washington, D.C., returns are due on April 18. In states affected by the storm, such as Alabama, California, and Georgia, returns can be filed until May 15.

The agency also postponed a change to its reporting requirements for 1099-ks.

The IRS said that electronic filers can expect their refunds via direct deposit within three weeks.

Increased funding from the Inflation Reduction Act allowed the agency to increase hirings this year, improving call response time for those seeking help. Last year, the agency was only able to answer 13% of the 173 million calls that came into its toll-free number.

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Source: Axios

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10 Comments

10 Comments

  1. Bill

    January 30, 2023 at 6:52 am

    Are they talking about the 2022 tax year? If so, the statement about EV credit is inaccurate.

  2. James Schoenman

    January 30, 2023 at 7:35 am

    No, no, no! Biden says he has not raised taxes on people making less than $400K. Reducing tax credits for working class people is raising the amount of tax paid. Wake up Demoncrats!

    • WRJack

      January 30, 2023 at 9:54 am

      That is not a good idea, since Trump did that when he was in office. That would be devastating to middle-class working people, who are already struggling.

    • JC

      January 30, 2023 at 11:46 am

      Absolutely James… Another roundabout way to hide the true intentions of this administration!

  3. bernard

    January 30, 2023 at 8:05 am

    They have to pay for all their spending, so they are trying to make it look like taxes are not going up. They think the American public are stupid. When in fact they are the stupid ones.

  4. Don

    January 30, 2023 at 8:27 am

    Demonrats will use any and all thievery to pay for their follies.

  5. joann clemens

    January 30, 2023 at 9:24 am

    The illegals get our hard worked money When are the people going to wake up Biden is trying to kill us he needs tp go

  6. JERRY MILLER

    January 30, 2023 at 12:20 pm

    “I AM NOT GOING TO LOWER YOUR TAXES, I AM GOING TO RAISE YOUR TAXES” ….. THIS IS THE MOST HONEST STATEMENT HE HAS MADE IN SEVERAL YEARS! …………… HOW QUICKLY WE FORGET.

  7. NATE

    January 30, 2023 at 12:27 pm

    JOE BIDEN NEEDS TO GO JOE NEEDS TO GO.HE HAS DID FAR TO MUCH DAMAGE

  8. Sean Richman

    January 30, 2023 at 8:45 pm

    WHAT’S a tax refund,never got one.

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