tax credit, other changes could mean a smaller refund in 2023

(WHTM) — Tax season has officially begun, with Monday, Jan. 23 marking the first day people can file 2022 taxes, but there are changes that may affect refunds for some people.

Many of the COVID-era programs that increased tax breaks are over and put more money in people’s pockets, which could mean a smaller refund. The good news is that there is help to navigate all of this.

“Last year, we returned more than $4 million to working families in our community,” said Heidi Newhouse, director of the United Way Volunteer Center in the Capitol District.

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For people filing their 2022 taxes, an ABC news report warns: Be prepared for a smaller refund. According to the report, the biggest factor is that the government did not issue any stimulus checks in 2022. Some people had accumulated previous checks issued in 2020 and 2021 into refunds.

“Yeah, there are some advantages…that are no longer available,” Newhouse said.

Many tax breaks that rose during the pandemic have also regressed to 2019 levels. In 2021, Congress expanded the child tax credit to $3,600 for children under 6 and $3,000 for children 6-18. This credit is again reduced to $2,000. The child and dependent care tax credit also fell from $8,000 to just over $2,100.

Navigating all of this can be confusing.

“A lot of our customers don’t understand the process,” Newhouse said. “It is enough to cause a lot of anxiety.”

United Way in the Capitol District is trying to help. As part of a federal program, the nonprofit provides free tax preparation services in several mid-state counties to families who need it most.

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“Our volunteers are specifically geared toward the tax breaks that our families deserve,” Newhouse said.

Trained volunteers help low- and middle-income families get every possible benefit and get money back quickly.

Please consider listening to your preparations when they ask you to file your return electronically. The IRS, like any other agency, has been closed during the pandemic, so they are sitting on a large backlog of paper returns, Newhouse said.

Experts say the quickest way to get a refund is to apply electronically and to file early. The deadline to file for 2022 taxes is April 18th.


https://www.abc27.com/news/top-stories/tax-credit-other-changes-could-mean-a-smaller-refund-in-2023/