The expiration of several pandemic benefits that lawmakers had created to support Americans in the pandemic could surprise millions of U.S. taxpayers when they received their 2023 tax returns.
According to Mark Steber, chief tax information officer at Jackson Hewitt, families may also receive reduced refunds when they submit their taxes for the tax year 2022. As per IRS data, the average tax refund in 2022 (for the 2021 tax year) was close to $3,200, an increase of 14% from the previous year.
The filing date is April 18, but the IRS said on Thursday that it would begin taking tax returns on January 23. This will give taxpayers an additional 3 days past the typical April 15 filing deadline. This is so because April 15 is on a Saturday and Emancipation Day in the District of Columbia is on Monday, April 17.
According to Steber, several of the benefits that increased refunds during the epidemic has expired, including the increased Child Tax Credit (CTC) and federal stimulus payments. Even the IRS is alerting taxpayers to the risk of stricter checks. In a news release from November, the tax authority issued a warning: “Refunds may be less in 2023.”
The CTC, which is recognized for rescuing millions of children from poverty, is one example of a tax benefit that is still in place but has been reduced back under the current tax system. In contrast to a pandemic credit that was as high as $3,600 per child, the CTC is returning to its regular level of $2,000 per child.