According to IRS data for the week ending February 17, the average refund is $3,140, a decrease of 11.2%, or $396, from the previous year.
The end of pandemic-era stimulus programs is affecting tax refunds.
According to IRS data for the week ending February 17, the average tax refund is $3,140, a decrease of 11.2%, or $396, from the previous year. The decrease is consistent with previous IRS warnings that people may receive “significantly smaller refunds” this year.
In 2023, refunds may be diminished. Due to the absence of 2022 Economic Impact Payments, taxpayers will not receive an additional stimulus payment with their 2023 tax refund. Additionally, the IRS stated in a statement that taxpayers who choose to take the standard deduction rather than itemize will not be able to deduct their charitable contributions.
The Earned Income Tax Credit, Child Tax Credit, and Child and Dependent Care Credit have reverted to pre-COVID levels.
Furthermore, Eligible taxpayers who do not have children and received around $1,500 in 2021 will now receive $560. The CTC is being reducing from $3,600 per dependent in 2021 to $2,000 per dependent. In addition, the CDCC returns to a maximum of $2,100 for 2022 taxes, down from $8,000 in 2021.
On the tax front, there is some good news. IRS efforts to expedite the process appear to be fruitful. IRS processed 36.8M out of 36.9M returns this year, indicating an almost 10% rise compared to last year.
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