Many U.S. taxpayers will see a difference in their 2023 tax refunds due to the stop on pandemic-related benefits and relief by lawmakers. This means that families may see a smaller refund when filing taxes for the 2022 tax year compared to the previous 2021 tax year. According to the IRS, the average refund in 2022 (for the 2021 tax year) jumped 14% from the prior year and on average families received almost $3,200 in refunds last year. Seeing a hefty refund like that again this year may be a slim chance for some taxpayers.
Some of the benefits that increased refunds during the beginning of the pandemic in many ways are no longer valid. In November the IRS released a news statement saying, “Refunds may be smaller in 2023.” The filing deadline for the 2023 tax season is April 18, giving taxpayers an extra three days beyond the typical April 15 deadline, due to the 15th falling on a Saturday.
Here’s a look at all the reasons you may not be getting a refund this year. Most of them are beyond your control, but there are cases where you should definitely follow up directly with the IRS.
You Received Advanced Child Tax Credit Payments
“Many families will recall that, starting in July 2021, they started receiving monthly deposits (or checks) from the IRS as part of the government’s COVID-relief measures,” said Taylor Hoffman, an investment advisor and director of financial planning. “These payments were unlike the stimulus payments received throughout 2020 and 2021, in that they were actually partial prepayments of the child tax credit that many families receive on their tax return each year (whereas the stimulus payments were more like free money).”
The child tax credit is a dollar-for-dollar write-off on your tax bill, Hoffman explained: “So, in other words, the IRS was paying people up front for a tax credit they would have otherwise received when they filed their taxes.”
Under current tax law, CTC levels have been reduced back to pre-pandemic levels. Now, the CTC is reverting to $2,000 per child, which is a $1,600 drop compared to the pandemic credit that reached as high as $3,600 per child.
“Therefore,” Hoffman said, “when those families go to file their taxes, they will only have half of the credit left to use as a write-off.”
You Heeded the Student Loan Moratorium
“The moratorium on payments has been extended into mid-202 by the Biden administration,” said Ryan McCarty, owner/CEO of McCarty Money Matters. “This has been a saving grace throughout the pandemic, (but) paying no student loan interest means no student loan deduction. Depending on how much interest you pay in a given year, this can be either a negligible or sizable difference year over year in your overall tax picture.”
You Collected Unemployment
“Unemployment income is a big one and presently on everyone’s minds,” McCarty said. “In 2021, we saw a taxable exclusion on the first $10,200 of unemployment income received in 2020…If someone received only unemployment during , the results may be negligible as your first dollars received are taxed at extremely low rates. If this was in addition to income received by a new job/endeavor, it could add a nice chunk of dollars that had no withholding.”
You Freelanced or Side-Hustled
“If you supplemented your lost income in  by working as a contractor and received 1099s rather than W-2s, we can only hope you set some aside to pay for your self-employment tax rates,” McCarty said. “This is certainly an eye-opener for those that have never dealt with such things.”
You Didn’t Make Enough Withheld Income
“If you didn’t work the entire year, either due to quitting or layoffs — both extremely relevant during  — you will find yourself with less tax withheld from your check,” McCarty said. “If you did not adapt your withholding properly along the way via your W-4 with employers, you could be exposed to a vastly different number compared to years past.”
You Traded or Sold Crypto
“Selling cryptocurrency or trading cryptocurrency for another cryptocurrency is considered a sale of property, and any gain is subject to capital gains tax,” said Yvette D. Best, owner of Best Tax Solutions LLC. “Cryptocurrency transactions typically result in short-term gains (tax on profits from the sale of an asset held for a year or less) and the capital gains tax rate is equal to your ordinary income tax rate.”
No Extra Deduction for Charitable Giving
The Coronavirus Aid, Relief and Economic Security Act, or CARES Act, gave provision for an extra $300 for single taxpayers and $600 for married couples on their 2020 and 2021 taxes for charitable giving. However, this deduction wasn’t renewed for 2022 which means taxpayers who don’t itemize will not get an extra deduction for charitable giving this tax year.
You Are the Victim of Identity Theft
“Identity theft is on the rise,” said Steven Jager, CPA and partner with Fineman West. “When someone files a tax return electronically using someone’s Social Security number (illegitimately), and then the ‘real’ tax return is filed legitimately, it is rejected. It must then be filed on paper and manually processed after the identity theft is investigated. It is a lengthy process and refunds can take a VERY long time to be received. We actually had a case where the refund of nearly a million dollars was just finally received on a tax return filed some years ago.”
The IRS Is Understaffed and Backlogged
“The IRS has a serious backlog of unprocessed regular filed tax returns and amended tax returns that will delay processing…,” said Trenda Hackett, technical tax editor at Thomson Reuters Tax and Accounting. “In fact, as of [mid-November], the IRS had backlogs of six million individual returns [held in suspension].”
If your tax information was amended or corrected and indicates that you are owed a refund, you might not receive a dime through no fault of your own, but because your account has not been updated by the IRS.
If you haven’t received your tax refund after six weeks of submitting your return, seek help from your local IRS office or call the federal agency. You also can check the status of your refund here.
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Nicole Spector contributed to this article.