If you’re used to getting a stimulus check tax return from the IRS around this time of year, financial experts warn that you could get less this year. Millions of Americans may receive a lower return or owe money to the IRS.
According to a study of 1,200 Americans, more than half of those polled expect their stimulus check tax refunds to be smaller this year. Furthermore, just 42% of individuals with a household income of less than $50,000 (a low-income household) expect to get any return.
Stimulus Checks Have To Be Filed For By April 18
Receiving a federal stimulus check often indicates that you overpaid your taxes the previous year, or that you withheld more than you owed based on your taxable income.
Last year the American Rescue Plan brought about a major change to the Child Tax Credit, first introduced during the Clinton administration. The change upped the amount on offer from $2,000 to $3,000, or $3,600 for children below six.
The one-year change also made the support fully refundable, which meant that more low-income families could receive all of the money. But the most significant change was to the payment structure, with monthly direct payments sent out to eligible families for the final six months of 2021.
This meant that half of the entire annual credit was sent out last year and means that only $1,500 for older children will be available to claim as a tax credit when you file your taxes.
This is $500 less than in past years and maybe prohibitively expensive for families with numerous children. The Department of Education enabled millions of Americans to halt their monthly student loan payments at the start of the epidemic in March 2020. It was an offer that about 90% of debtors enthusiastically accepted, and the loan reduction was extended through 2021.
While this helped many people get through the epidemic, it does mean that borrowers will no longer be able to claim the write-off for student loan interest that was previously accessible. If your tax bill increases unexpectedly, your refund may be decreased or eliminated.