SMALLER TAX REFUNDS FOR SOME
Smaller tax refunds for some. Many Americans may be surprised to find that the large tax refund they were expecting, isn’t quite as large as they thought. The size of the refund will largely depend on whether you received monthly advance payments of the Child Tax Credit (CTC). If you did, then you should expect that your tax refund will be going down. Also, you should expect significant delays in getting any refund you have coming to you, as the IRS has diverted a large portion of its workforce to catching up past due tax returns from the 2021 tax season. The National Taxpayer Advocate put that number this last fall at 15 million tax returns. So it appears that this year’s tax filing season will be a slow slog to the finish line. Smaller tax refunds for some.
The American Rescue Plan passed in march increased the Child Tax Credit from $2000 per child to $3000 per child aged 6 to 17 and $3600 for those under 6. It also authorized half to be distributed in advance each month-from July to December of last year-which wasn’t done before. The remaining half is given out later. If your refund is largely just the Child Tax Credit, there’s a good chance your refund will be lower because of this. The quickest way to determine whether you will get a refund and what the amount will be, is to file your tax return electronically. The IRS also had not processed millions of pieces of mail from last year, and if you send in your tax returns by mail, it may take them many months to process the tax return, and give you whatever tax refund you have coming to you. If you end up owing taxes, whether you utilized the Child Tax Credit or not, you may want to use our Tax Resolution Services. If you owe a large amount you may want to investigate the IRS Fresh Start Program.