IRS Refund news
The IRS will begin processing E-filed tax returns on January 23. However, your return information can be entered into tax software earlier and then E-filed on January 23. The IRS will begin processing paper returns a week or two later.
The IRS is warning you to refrain from counting on getting your refunds by any specific date.
Some returns will need extra time to review and could take longer to process. Returns that claim some tax credits, such as the Earned Income Tax Credit, may take longer for filers to get their refunds.
By law, the IRS can’t issue the Earned Income Tax Credit or the Additional Child Tax Credit refunds before mid-February. This includes your entire refund, not just the part that’s related to the credit you claimed on your tax return. If you claimed the Earned Income Tax Credit or the Additional Child Tax Credit, you can expect your refund on March 1 if you E-file and use direct deposit.
Most E-filed returns receive their refunds within three weeks. Filing a paper tax return requires manual processing and can take six months or more.
The due date for filing W2 and 1099s is January 31. However, you may not receive all the forms needed for your return until the first week of February if they are mailed to you.
The IRS is also cautioning that taxpayers may receive smaller refunds for their 2022 returns because of the expiration of many pandemic benefits that had been designed to help Americans cope with the crisis.
Some tax credits will return to 2019 levels. This means that if you receive the credit, you will likely receive a smaller refund compared to your 2021 refund. Changes to credits include the Child and Dependent Care Credit, Earned Income Tax Credit, and Child Tax Credit.
The Child Tax Credit was $3,600 per dependent in 2021 but has been reduced to $2,000 for 2022. The Child and Dependent Care Credit returns to a maximum of $2,100. The maximum credit in 2022 was $8,000. The Earned Income Credit for people with no children was about $1,500 in 2021 but will be reduced to about $500 in 2021.
The IRS is hiring thousands of new employees with the goal of being better prepared for the 2023 tax filing season.
David Zubler is a tax accountant and Enrolled Agent in East Tennessee, providing tax strategies and representing clients before the IRS and has over 25 years of tax experience. He is the author of six tax books and has shared tax advice on national TV. He is the founder and president of Your Tax Care. The company provides business and tax education, including David’s one-minute tax tip radio recordings at YourTaxCare.com. David can be reached at (865) 363-3019 or contacted by email at firstname.lastname@example.org.