The end of “COVID-19 Era” tax breaks will change how taxpayers file deductions this year and will likely mean smaller refunds or larger balances owed for many Americans, the Internal Revenue Service (IRS) said.
Among the various pandemic tax credits that have returned to 2019 levels is the Child Tax Credit (CTC). Taxpayers eligible for $3,600 per dependent in 2021 will receive a $2,000 credit in 2022 for each eligible child aged 17 or under, depending on income.
Taxpayers without children who claim the Earned Income Tax Credit will receive $500 base 2022, revised from $1,500 in 2021. Child and Dependent Care Credit will return to a maximum of $2,100 in 2022 instead of $8,000 in 2021.
Taxpayers should also be aware that the above-the-line charitable deductions, which were $300 per individual taxpayer or $600 per joint filing, have not been extended into 2022. Taxpayers will have to specify to claim these deductions this year.
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