Prepare for a ‘refund shock’ when filing your taxes in 2023

Tax refund check and tax documents.
Tax refund check and tax documents. Photo credit Getty Images
By , Audacy

Don’t be surprised if your tax refund check for next year is far smaller than last year’s, as millions of U.S. taxpayers will see less money on their 2022 returns then they did on their 2021 returns.

Part of the reason for the dip in tax refunds is due to the expiration of numerous pandemic benefits passed to help Americans at the height of COVID.

As a result, many will be in for a shock, according to chief tax information officer at Jackson Hewitt, Mark Steber. While speaking with CBS News, Steber shared that the benefits that boosted refunds for many families have ended.

This means that the average 2022 refund of $3,200, which was 14% higher than 2021, will most likely not be what many see this year, with stimulus checks and the expanded Child Tax Credit ended.

Some tax credits like the CTC will still exist, but not at the boosted level it was during the pandemic. During the pandemic the credit was at $3,600 per child, but now it will be back at $2,000.

Other notable changes also include the reduction to pre-pandemic levels for the Child and Dependent Care Credit, which was raised to $8,000 per year per family, but is now back down to $2,100.

The Earned Income Tax Credit has also been lowered. This credit allowed low-to-moderate income workers without kids to receive a credit of up to $1,500. The amount this year will be reverting to $560.

Steber said that 2021 “was quite a remarkable year with the insertion of all those new tax breaks. But jump ahead to this year, and a lot of the increases expired, hence the term ‘refund shock’ or ‘refund surprise.’”

Now, the average refund for this year will be approximately $2,700, closer to what was seen in 2021, according to Steber, who also said that it will depend on each individual tax payer as numerous factors could drive that higher or lower.

So while last year filing your taxes meant you got a little more money, Steber told CBS News that taxpayers should not expect the same refunds next year.

"You're probably going to have not as pleasant an experience as you had last year," Steber said.

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Featured Image Photo Credit: Getty Images