Taxpayers get $ 650 more because of Coronavirus stimulus checks and tax returns
Taxpayers get $ 650 more because of Coronavirus stimulus checks and tax returns

Taxpayers get $ 650 more because of Coronavirus stimulus checks and tax returns

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Fresh stimulus checks do not come, but it is possible that stimulus payments results in people getting higher reimbursement this year. According to the latest data from the IRS, the average reimbursement issued so far this year is more than last year. It is believed that a link between stimulus checks and tax returns results in people getting higher reimbursement. This year, the tax filing season started on January 24, and the deadline for filing tax returns is April 18.

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Stimulus checks and tax returns: What is the connection?

Last year, the American Rescue Plan Act offered stimulus checks of up to $ 1,400 to eligible recipients. Similar to previous stimulus checks, $ 1,400 stimulus check was also a prior tax deduction.

Those who did not receive the stimulus money last year were allowed to claim them this year by submitting their tax return. Many believe that this, ie. People claiming unpaid stimulants are a likely cause of higher average reimbursement amounts this year.

Recently, the IRS released the tax return data (of its activities up to and including 18 February 2022), which shows that it has processed more than 33 million The average reimbursement amount issued so far is $ 3,536 compared to an average reimbursement amount of $ 2,880 in 2021. This suggests that people are getting an average of $ 656 more in their tax return this year.

One point to note is that $ 656 is an average amount, meaning many taxpayers would have received a smaller refund, for many there would have been no change, and some would have received a higher-than-average refund.

Other probable causes for higher repayments

Along with the stimulus check, the American Rescue Plan Act extended the child tax deduction (CTC) from $ 2,000 to $ 3,600 for children under 6 and up to $ 3,000 for older children. Only part of the original child tax deduction was refundable, but with the extended CTC the full amount is refunded. This is another reason why taxpayers are getting (or can get) higher reimbursement this year.

In addition, families or individuals who added a breadwinner last year may also not have claimed the current stimulus payment (stimulus check, payer payment, and child tax deduction) last year. They are eligible to claim the money this year and this is another likely reason why the average repayment amount is much larger this year so far.

It is likely that this average reimbursement amount may increase or decrease as the agency processes multiple returns. To know this, we will have to wait IRS to share more data.

“For a historical perspective, it is important to remember that these weekly figures can change dramatically during the first weeks of the filing season due to several factors, including the calendar and filing patterns, which can change from year to year,” the agency said.

So far, at least, we know that taxpayers are getting higher refunds, and one likely reason for this is a link between stimulus checks and tax returns.

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