Although these are early numbers, taxpayers are likely to see a smaller return due to a number of key tax credits reverting to pre-pandemic amounts.
WASHINGTON — With more than 16 million tax returns already processed, Americans could see fewer tax refunds this year.
According to the data, compensations are still coming in almost 11% less than last year the first data from the Internal Revenue Service. As of February 3, the average compensation was $1,963, down 10.8% from the average of $2,201. reports for the beginning of 2022.
While the average may change as more returns are processed, taxpayers are likely to receive a smaller refund due to a number of key tax credits reverting to pre-pandemic amounts.
The IRS expects more than 168 million individual tax returns this tax season.
Why is my tax less this year?
Changes to the child tax credit for 2023
One of the biggest changes this is the loss of the extended child tax credit, which was increased from $2,000 to $3,600 per dependent in 2021.
Most families received half of their extended credit each month in 2021, and the other half after they filed their taxes.
But the pandemic-era expansion ended in 2022, and full payments would again go only to families who earned enough income to owe taxes, a policy choice that would limit benefits to the poorest families.
“It’s going to affect families very differently, depending on family composition, income,” said Joanna Ain, deputy policy director for Prosperity Now, a national nonprofit that focuses on opportunities for low-income families income and racial economic justice. “I think a lot of families are going to be disappointed this year if they don’t have access to this really important tax break.”
In 2021, the child tax credit lifted 2.9 million children out of poverty, according to US Census Bureau estimates. The agency found that expanding the program resulted in 2.1 million of those 2.9 million children falling below the poverty line.
Other changes to the tax credit
The Earned Income Tax Credit and Child and Dependent Care Benefit will also return to 2019 standards.
The EITC, which is available to low- and moderate-income families and people without children, will now be $500, up from the $1,500 paid in 2021 to those who qualify. The credit for child and dependent care has returned to a high of $2,100, a far cry from the $8,000 high set in 2021.
When can I expect a tax refund?
The IRS expects that most taxpayers who chose direct deposit and had no problems will receive their refund within 21 days of e-filing their tax returns.
Taxpayers can audit agencies “Where’s my return?” on IRS.gov to learn about their refunds.
If you’re expecting a refund and have claimed the Earned Income Tax Credit or the Additional Child Tax Credit, the IRS won’t refund the money until February 28 or a few days earlier. The the agency explains on its website that by law they cannot claim back the EITC or ACTC until mid-February. Most EITC or ACTC refund statuses on the IRS website will be available from February 18.
When is the deadline for filing taxes?
Americans have until April 18 to file their tax returns, giving them an extra three days from the usual deadline.
The extra days happened because the normal filing date of April 15 falls on a weekend and the D.C. Liberation Day holiday falls on April 17.