Stimulus Checks To Be Smaller: IRS Cautions Filers Not To Bank Of Their Tax Refunds For Large Expenses

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Even as the state stimulus checks go out in the festive season, the IRS has cautioned income taxpayers not to fall back on getting their refunds by any specific date when they file their returns in the first quarter of 2023.

The agency said in a recent release that the tax returns will have to be reviewed and that would cause an amount of delay and would push back the whole process by weeks. the alert from the IRS comes even as taxpayers continue to wait for their income tax returns from the previous filing season to be processed.

The IRS has spoken of a massive backlog as the number of filers has grown during the pandemic years as more people have filed their returns to avail of the series of stimulus checks that were linked to filing income tax returns by potential beneficiaries.

The tax authorities are yet to start on new tax returns in January 2023. But income tax filers have been advised to get their papers in order as quickly as possible and file their 2022 returns.

Filing early will facilitate the process faster and the refunds stimulus checks will come in early for Americans, the IRS has advised. The income tax refunds have been a big help for Americans in paying their bills and debts and also in making large purchases and setting aside a part of it for future crises.

Around 110 M individuals and families receive an average tax refund of around $3,200 in 2022 the IRS has revealed. But the tax authorities have warned that Americans should not expect the 2023 refunds to be as early this year. they said that as of now no specific dates can be given for the refunds due to the considerable bottleneck.

No certain dates can be given to taxpayers to receive their 2022 federal income tax refunds and people should not plan any of their major purchases depending on the refund stimulus checks the IRS has said early in November.

The IRS pointed out that most refunds are sent within 3 weeks, but extraordinary issues are slowing down the 2022 income tax year process, with the sudden spurt in the number of filers being one of the reasons.

The income tax refunds in 2022, against the 2021 tax year, were almost 14% more at $3,200 than the previous year. but the average stimulus check early next year may revert to the amount that filers normally received in the pre-pandemic years, which comes to a maximum of around $2,700.

It has been exceptionally tough for income tax filers in the last three years as millions of income tax returns stuck in a logjam as the COVID-19 pandemic posed multiple challenges both for filers and the tax authorities.

The tax agency is taking measures by hiring thousands of fresh employees to be better prepared for the tax filing season of 2023.

The number of returns that have been delayed has gradually increased to 12.4 M tax returns that were being processed in the September figures. It is a hefty increase of 1.9 M more backlogs from the year earlier, as revealed by the Accountability Office. The GAO said that the figures indicate that millions of filers have their tax refunds inordinately delayed this year and the trend will continue into the next.

State Stimulus Checks Only Support In the Absence Of Federal Payments

The state stimulus checks have moved into the last quarter of 2022 and will spill over into January 2022 for around 3 states. Governor Jared Polis of Colorado signed into law a bill earlier this year that gives residents up to $750 for individuals and double that for joint filers.

Numerous states have issued tax rebates and stimulus checks to their residents in various forms, but all have been linked with either the pandemic or the record inflation that followed. The Centennial State is giving the money to almost all its taxpayers in a program that has been unofficially dubbed the Colorado Cash Back.

A senior state official stated that the payments are to compensate Colorado families as they continued to feel the pain of the economic effects of the pandemic. she said that the most effective way was to provide direct monetary support to Coloradans.

Most residents of Colorado have already received the stimulus checks in their mailboxes. Eligible filers who filed their state tax returns or have applied for a PTC Rebate (property tax, rent, or head credit rebate) by the end of June 2022 should have received their Cash Back payment by September 30 this year.

Residents who have received an extension on their state income tax return have been given until October 17 this year to file their returns. Their stimulus check will be delayed and will be pushed back into the next year. but they should have their payments cleared by the end of January next year.

The Colorado Cash Back was possible thanks to a change in the TABOR, the Taxpayer’s Bill of Rights that requires the state administration to give back to residents any excess revenues generated by the state.

Originally the refunds were reckoned to be around $400 for each taxpayer but the strong economy of the state has enabled the government to boost the TABOR payments to $750 for individual taxpayers and $1,500 for joint tax filers.

The criteria for receiving the Colorado Cash Back is simple anyone above 18 years on December 31, 2021, and a resident of the state for the whole year in 2021 is eligible for the state stimulus check.

They must also have filed the 2021 state tax return or applied for the PTC Rebate. Even residents who filed their 2021 state taxes and fulfilled all other criteria but moved out of the state in 2022 are still eligible for the payments.

Residents who do now owe taxes or who are claimed as a dependent by someone else will also receive a stimulus check as long as they have filed their state tax returns for 2021 by October 17.

The reason behind this is that the TABOR stimulus checks are sales tax refunds and not income tax refunds, revealed a revenue department spokesman for the state.