IRS Tax Refunds 2022: which taxpayers will receive the largest payments?
Tax season is approaching and it could bring a significant payment for some filers who missed out on stimulus check or Child Tax Credit payments last year.
The Internal Revenue Service have announced that this year’s tax season will begin on Monday, 24 January, at which point it will start accepting filings for the 2021 tax year. With the pandemic continuing to have a negative impact on household finances for tens of millions of people, there is understandable anticipation for the tax refunds to be distributed.
Tax refunds are issued when someone has paid more in taxes than they were actually liable for, or in some instances where the government has effectively overcharged your tax bill in the past. In these instance the government essentially cuts a check to the individual to correct the mistake.
For the 2020 tax year, the average tax refund for recipients was $2,827, according to the National Taxpayer Advocate (NTA). However the actual amount that you will receive is based entirely on your individual circumstances, so any high-earners who usually pay a large amount of tax but then suffer a sudden loss of income will likely be due much of it back in the form of a tax refund.
Pandemic uncertainty could cause delays in the tax refund process
The vast majority of adult Americans will be required to file their tax return for the previous year, outlining their earnings and other forms of income to the IRS, but that task has become more difficult recently thanks to the pandemic.
IRS Commissioner Chuck Rettig said: "The pandemic continues to create challenges, but the IRS reminds people there are important steps they can take to help ensure their tax return and refund don't face processing delays. Filing electronically with direct deposit and avoiding a paper tax return is more important than ever this year.”
The pandemic challenges mentioned by Rettig include the introduction of new forms of tax relief that the IRS now has to process. Two of the most commonly available are the Economic Impact Payments, or stimulus checks, and the Child Tax Credit monthly payments.
“We urge extra attention to those who received an Economic Impact Payment or an advance Child Tax Credit last year. People should make sure they report the correct amount on their tax return to avoid delays,” Rettig said.
Fortunately, if you missed out on either of those forms of support less year then it is not too late to claim a payment from the IRS. Check out our handy guides on how to claim a missing stimulus check or Child Tax Credit payment in your 2022 tax return.