(TheRedWire.com) – The IRS has warned that in 2023 taxpayers should expect to receive smaller refunds because of the pandemic relief measures expiring. As such in 2022 there were no stimulus payments from the government, with the last stimulus payment having gone out in 2021.
The stimulus payments had essentially been given as a recovery rebate credit to millions of taxpayers. There was also additional help provided during the pandemic through the expansion of the child tax credit (CTC) which acted as a social safety net. However, this credit also expired in 2021.
The IRS has said that with both the Advanced Child Tax Credit and the Recovery Rebate Credit having expired, taxpayers would most likely receive a much lower refund that year.
Another expiration that might affect taxpayers relates to the tax break for charitable deductions. Howard Gleckman, a tax expert from the Urban-Brookings Tax Policy Center, had said that the reason for the changed tax returns this year was the lack of stimulus payments and credits.
The IRS has noted that whether or not the refund would be lower for the 2022 tax year would depend on each person’s individual situation.
The Biden administration’s American Rescue Plan expanded CTC had allowed families making up to $150,000 per year up to $3,000 per child instead of $2,000 for children over the age of 6 and up to $3,600 for children younger than six. The credit age limit had also increased to 17. This led to many families getting thousands of dollars in their tax refunds which helped decrease the U.S. child poverty rates.
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