GREENSBORO, N.C. — You need to prepare yourself because chances are your tax refund in 2023 is not going to be what you expect.
“A lot of what we find is a lot of taxpayers expect their refund to be the same from year to year and unfortunately this is going to be one of those years where it’s not going to be the same,” said Ryan Dodson of Liberty Tax Services.
Here's why it's not going to be the same. The tax laws changed in 2022, back to pre-COVID tax laws.
THE CHILD TAX CREDIT
In 2022, the Child Tax Credit reverts back to $2,000 per child. Last year, parents got a credit of between $3,000 to $3,600 per child. At a minimum, you're getting a thousand dollars less.
If you make under $30,000, the formula used for the Child Tax Credit and the refundable part also changed, which could leave folks with a difference in refunds from year to year totaling $3,000 less.
CHILD & DEPENDENT CARE CREDIT
The Child and Dependent Care Credit helps families pay for expenses for childcare so they can work or look for work. The credit also is available to families that must pay for the care of an incapacitated spouse or an adult dependent.
This year, the tax law allows for up to 30% to 35% to be claimed.
In 2021, families were able to claim a 50% max credit.
“Some of the higher income earners, I'm talking about those who make over $100,000 or families that were available for this credit in previous years, will not be able to get this credit this year,” said Dodson.
2022 TAX LAW CHANGES
There was no federal stimulus payment this year. In the last few years, the tax law changed to include charitable donations up to $300 even if you took the standard deduction. That expanded charitable giving deduction is no more.