Good Question: Are tax refunds going to be smaller this year? | WHEC.com

Good Question: Are tax refunds going to be smaller this year?

WHECTV
Created: January 28, 2022 06:03 AM

ROCHESTER, N.Y. (WHEC) — News10NBC's Brennan Somers took your Good Question to Jim Schnell from the local tax firm, Mengel Metzger Barr & Co.

SCHNELL: "We're kind of seeing a couple different things converge here."

That means things could be much different for you filing this time around compared to last year. What changed?

SCHNELL: "Last year at this time - 12 months to the day - the big thing were the stimulus checks and the two or three payments received during that year needed to be reconciled on their 2020 returns. In almost all cases some people got more money refunded."

There's also a second issue.

SCHNELL: "The other factor at play for 2020 alone, the $10,200 exempt on a federal level for unemployment. Those two factors led to extra refunds for a lot of people. Those two things were isolated only for 2020 so statistically refunds will be reduced for those factors."

If you collected unemployment benefits when you were out of work in 2021, this year, unlike last, you're going to have to pay taxes on those benefits.

Then, there's the expanded child tax credit. Half of it was paid out to millions of qualifying families from last July through December. Parents will claim the other half when they file their returns. So for them, it's a smaller write-off.

Some families though, opted out of the monthly prepayments to get it all at once when they file.

Who else might see more cash coming their way from the IRS?

Did you have a new baby last year? If that's you, first off, congrats! Second, you're probably owed some money. Eligibility for the child tax credit and third stimulus checks was based off previous returns. The IRS didn't know about your new addition.

You can claim the credits when you file this time. That could bump your refund by $5,000.


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