IRS Says Tax Refunds to Be Smaller This Year

The Internal Revenue Service said Wednesday your refund for the 2022 tax year may be smaller than in the past.

There have recently been several changes to the tax code.

The IRS said taxpayers who take the standard deduction instead of itemizing their taxes will no longer be able to deduct their charitable contributions. Also, 2021s American Rescue Plan Act lowered the reporting threshold for third-party networks that are payment processors.

A 1099-K form can now be triggered by a transaction exceeding $600. The threshold used to be $20,000 in aggregate transactions.

The IRS said it can't issue returns for the Earned Income Tax Credit (EITC) or the Additional Child Tax Credit (ACTC) until mid-February because the law requires it to hold the entire refund to detect fraud.

Some large refunds for 2020 and 2021 were allotted for taxpayers without economic impact stimulus payments.

The IRS says it can't correct the form for those who used payment processors and received a 1099-K for the income they didn't earn. Taxpayers will have to call the issuer.

Expanded tax credits are available in the form of Premium Tax Credit and Clean Vehicle Credit.

The IRS has acknowledged that there were 3.7 million unprocessed individual returns it received in 2022 as of Nov. 11 and 900,000 unprocessed 1040-X for amended tax returns.

"The IRS is processing these amended returns in the order received, and the current time frame can be more than 20 weeks," the IRS said in a release. "Taxpayers should continue to check Where's My Amended Return? for the most up-to-date processing status available."

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