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Tax Law Changes Causing Lower Tax Refunds
Many people are wondering why they have a lower tax refund in 2023. If you have already filed your tax return or used a tax calculator to get a glance you might be shocked that it’s a lot lower than the refund you got last year. There are a lot of reasons it could be lower but there have been some major changes to tax credits, deductions and rules following 2021.
Lower Tax Refund Credits
- Child and Dependent Care Credit
- Child Tax Credit
- Earned Income Tax Credit (EITC)
Refundable Credits
Some credits were fully refundable last year but if your tax refund is lower it could be because some credits are only partially refundable.
Removed Tax Credit
Last year some self-employed people could use Self-Employed Tax Credits for Paid Leave if they had a loss of income because of COVID. This provision is no longer available.
Stimulus Checks
Federal stimulus checks could cause a tax refund to be lower because some people who missed their stimulus checks during the year were able to have them refunded on their tax return.
Lower Tax Deductions
In the past you may have used a deduction for student loan interest you paid. Since the pause of student loan payments, many people were not paying interest.
More Specific Details
If you want more detailed information about specific dollar amounts and rule changes, our friends at The College Investor provide a great in depth review of each change.
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