Taxpayers could experience ‘refund shock’ due to certain credit changes this year, expert says

The 2023 tax season might look a little different for some taxpayers due to certain credit changes. (Source: KKTV)
Published: Jan. 20, 2023 at 3:02 PM HST
Email This Link
Share on Pinterest
Share on LinkedIn

COLORADO SPRINGS, Colo. (KKTV/Gray News) - A tax preparer in Colorado says this tax season might look a little different for taxpayers than in recent years.

“Taxpayers are going to experience something called refund shock,” David Fruh, with Jackson Hewitt Tax Service, said.

Fruh told KKTV that refund shock is going to be a product of two things: no more stimulus money for a recovery rebate credit and a lot of tax credits have reverted back to pre-pandemic levels.

“We had a recovery rebate credit, which was good for $600, $1,200, or $1,400 per individual. But this year that’s gone,” Fruh said.

Fruh explained that some of the tax credits families were granted over the last couple of years are also changing this year.

“The child tax credit, which was good for $3,600 last year, has changed to $2,000 per qualifying child. Also, the Dependent Care Credit, which was good up to $8,000 last year, is back down to $1,221 this year,” Fruh said.

According to Fruh, the team will be assisting those taxpayers with any of their refund questions.

“I think taxpayers should prepare for their tax returns to look more like 2018 and 2019,” Fruh said.

Tax Day is April 18, when individual income tax returns are due to be submitted to the federal government, according to the Internal Revenue Service.

Fruh also urged taxpayers to look out for possible scams during the upcoming tax season.

“You should file as soon as possible to avoid identity theft,” Fruh said. “Identity theft is an increasing problem with the IRS, and the sooner you file, the greater the chances that you will not experience it.”

Additionally, the IRS said it will never ask for personal information through email or contact a taxpayer through social media.

If you owe money to the IRS, the agency said it would contact you through the mail.