As I’m sure you know, Congress seems to make changes to tax laws just about every year. This year was no exception, so here are a few things related to taxes that you should be aware of as we head into 2023.
Some tax credits return to 2019 levels
Some tax credits that were adjusted in recent years are scheduled to return to 2019 levels. This means that you might receive a smaller refund compared to recent tax years. Changes include amounts for the Child Tax Credit (CTC), Earned Income Tax Credit (EITC) and Child and Dependent Care Credit.
- If you got $3,600 per dependent in 2021 for the CTC, you will (if you’re eligible) get $2,000 for the 2022 tax year.
- For the EITC, if you have no children and received roughly $1,500 in 2021, you will now get $500 in 2022.
- The Child and Dependent Care Credit returns to a maximum of $2,100 in 2022 instead of $8,000 in 2021.
No above-the-line charitable deductions
In recent years, you could take up to a $600 charitable donation tax deduction on your tax return, due to Coronavirus relief passed by Congress. However, in 2022, you may not take an above-the-line deduction for charitable donations if you take the standard decuction.
More people eligible for the Premium Tax Credit
In tax year 2022, you may still qualify for temporarily expanded eligibility for the premium tax credit.
Clean vehicle tax credit
If you are interested in claiming a tax credit for a plug-in electric vehicle, you should be aware that those rules may have changed, depending on when in 2022 you purchased your vehicle. Please contact our office for more information.
This article carries no official authority, and its contents should not be acted upon without professional advice. For more information about this topic, please contact our office.