According to the most recent weekly data from the IRS, tax refunds are consistently less than a year ago, which is a result that many tax experts had predicted.
Yet, the agency is in control of the filing season, which is a change from the previous several years.
IRS Sends Millions Of Tax Refunds
Based on 53.9 million tax returns filed through March 17, the IRS said that the average refund amount was $2,933, a decrease of 11.3% from $3,305 during the same period the previous year when the agency processed 51.7 million refunds.
Compared to $171.1 billion last year, the IRS has distributed $158.1 billion in tax refunds. As most of the benefits from the pandemic era have expired, tax experts this year warned that refunds could be less, which is bad news for taxpayers relying on that infusion of cash.
For instance, the improved Child Tax Credit, worth up to $3,600 per child, and the child and dependent care tax credit, worth up to $4,000 per dependent, provided relief to numerous families in 2021.
Nonetheless, the tax reductions have returned to their prior levels. The Child Tax Credit was increased to $2,000 per kid for 2022, and the child and dependent care tax credit was reduced to $1,050 per dependent.
However, according to Smith, data from the same week of the 2021 filing season also reveals a similar average refund to the most recent statistics. The average return was $2,929 as of March 19, 2021, about $4 less than the figures released on Friday.
According to the most recent statistics, as of March 17, the IRS had processed 1.6% more submissions while having received 0.5% fewer returns than the previous year.
In general, if you filed an electronic, flawless return with direct deposit for the payment, you can anticipate receiving your refund within 21 days.
Examining all the information on your return, such as your address, Social Security number, and direct deposit information, will help you prevent needless delays.
Why This Year’s Reimbursements Are Less?
Several of the American Rescue Plan’s tax benefit improvements came to an end this year. For instance, the Child Tax Credit was reduced from $3,600 per child dependent to $2,000 this year.
Additionally, the credit is no longer fully refundable, so taxpayers won’t get the full amount if the credit exceeds the amount of tax they paid. Households with lower incomes were most severely impacted.
For eligible single filers without children, the maximum Earned Income Tax Credit decreased from $1,502 to $500 this season. The Child and Dependent Care Credit, which covers out-of-pocket expenses for day camps and child care, was decreased this year from $8,000 to $2,100.
Lower refunds may also be the result of the elimination of the above-the-line charity deduction and the expiration of the deduction for mortgage insurance premiums.
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