Pandemic Relief Boosts Taxpayer Refunds

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That’s how much bigger the average federal refund is so far this tax season—11.5% more than last year—likely because of pandemic-era benefits.

The average refund as of April 1 was $3,226, well over the $2,893 average refund at this time last year and the $2,805 average for the past five years, according to the latest IRS statistics. Refunds are higher because of several expanded tax credits Congress approved as part of pandemic relief last year, including the child tax credit, said Mark Steber, chief tax information officer at Jackson Hewitt. The lack of several of those benefits next year is likely to shrink refunds by a third or more, he warned.

“You’re going to see a much bigger refund shock season a year from now,” Steber said. 

Congress not only boosted tax credits for parents and those who paid for child or dependent care, but made them fully refundable so that even people who didn’t earn enough for the tax offset were able to collect the entire amount. Expansion of the earned income tax credit and changes in deductions for charitable donations also helped push refunds higher, Steber said.

Note

The deadline for filing federal tax returns is Monday, April 18 this year (not the 15th), so if you haven’t filed, you’ve only got a few days left. Here’s a comprehensive how-to guide

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Sources
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  1. Internal Revenue Service. “Filing Season Statistics for Week Ending April 1, 2022 | Internal Revenue Service.”

  2.  Internal Revenue Service. “Topic No. 602 Child and Dependent Care Credit | Internal Revenue Service.”

  3. Jackson Hewitt. “What is the Earned Income Tax Credit (EITC)?.”

  4. Internal Revenue Service. “Expanded tax benefits help individuals and businesses give to charity during 2021; deductions up to $600 available for cash donations by non-itemizers | Internal Revenue Service.”

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