Procrastinators may find what early filers already know: Tax year 2022 is not producing as many happy returns as in previous years due to a number of changes, including the expiration of some pandemic-era tax breaks.
People are also reading… For the 63 million people who had already filed their tax returns as of March 10, the average refund is down 11% to $2,972, according to the latest IRS data.“The people that want to get it done right away are the ones that expect that refund, and they want to get that money back,” Rahill said. “If they don’t expect a big refund, there’s no urgency to file.”
Child and dependent care expensesAn American Rescue Plan increase on the maximum amount of care expenses you’re allowed to claim for a child or dependent also expired in 2022, dropping the maximum credit from $8,000 to $3,000 per person. Clean vehicle creditThe Inflation Reduction Act expanded a tax credit of up to $7,500 for new electric vehicles and added a credit of up to $4,000 for used EVs purchased in 2023. But the law also added price caps, income limits and other restrictions that may reduce or eliminate the tax credit.
A few other wrinkles to consider: New EVs purchased after Aug. 17 have to be assembled in North America to get the $7,500 tax credit for 2022. A cumulative 200,000-vehicle manufacturer’s sales cap has been eliminated in 2023, but Chevy, GMC and Tesla EVs sold last year do not qualify for the credit.