Thomas Brock, CFA, CPA, expert contributor to Annuity.org
  • Written By
    Thomas J. Brock, CFA®, CPA

    Thomas J. Brock, CFA®, CPA

    Expert Contributor

    Thomas Brock, CFA®, CPA, is a financial professional with over 20 years of experience in investments, corporate finance and accounting. He currently oversees the investment operation for a $4 billion super-regional insurance carrier.

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  • Edited By
    Savannah Hanson
    Savannah Hanson, financial editor for Annuity.org

    Savannah Hanson

    Senior Financial Editor

    Savannah Hanson is an accomplished writer, editor and content marketer. She joined Annuity.org as a financial editor in 2021 and uses her passion for educating readers on complex topics to guide visitors toward the path of financial literacy.

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  • Published: January 30, 2023
  • 2 min read time
  • This page features 5 Cited Research Articles
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How to Cite Annuity.org's Article

APA Brock, T. J. (2023, March 2). Why You Might Receive a Smaller Income Tax Refund in 2023. Annuity.org. Retrieved April 1, 2023, from https://www.annuity.org/2023/01/30/why-you-might-receive-a-smaller-income-tax-refund-in-2023/

MLA Brock, Thomas J. "Why You Might Receive a Smaller Income Tax Refund in 2023." Annuity.org, 2 Mar 2023, https://www.annuity.org/2023/01/30/why-you-might-receive-a-smaller-income-tax-refund-in-2023/.

Chicago Brock, Thomas J. "Why You Might Receive a Smaller Income Tax Refund in 2023." Annuity.org. Last modified March 2, 2023. https://www.annuity.org/2023/01/30/why-you-might-receive-a-smaller-income-tax-refund-in-2023/.

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Oftentimes, receiving an income tax refund from the Internal Revenue Service (IRS) or other taxing body is a pleasant surprise. Unfortunately, the IRS advises most taxpayers to expect a smaller refund in 2023 as compared to recent years. The key reasons are outlined below.

No Special Stimulus Payments for 2022

Unlike 2020 and 2021, there are no special economic stimulus payments for 2022. As a result, holding all else constant, the average taxpayer can expect a higher federal income tax obligation (and a smaller refund) due to the stimulus phase-out.

Some 2022 Tax Credits Are Reverting to Pre-COVID-19 Levels

The most notable reversions relate to the Child Tax Credit (CTC), the Earned Income Tax Credit (EITC) and the Child and Dependent Care Credit

For example, if eligible, filers who got $3,600 per dependent for the CTC in 2021 will only get $2,000 for the 2022 tax year.

For the EITC, eligible taxpayers with no children who received roughly $1,500 in 2021 will only get $500 in 2022.

For 2022, the Child and Dependent Care Credit will return to a maximum of $2,100, instead of the $8,000 granted in 2021.

The IRS provides a comprehensive breakdown of other potential tax breaks. 

Expert’s Take
“While a tax refund can be a nice surprise, it is a suboptimal situation, especially if the refund amount is significant. After all, a refund simply means you have overpaid the IRS. Financially savvy individuals might hold as much of their money as possible and put it to work via interest and dividend-bearing investment vehicles.”
— Thomas J. Brock, CFA®, CPA

No Above-the-Line Charitable Deductions for 2022

Following the COVID-19 outbreak, taxpayers could take up to a $600 charitable donation tax deduction on their tax returns. However, in 2022, those who take a standard deduction may not take an above-the-line deduction for charitable donations.

Closing Thoughts

The IRS advises that some 2022 returns will take longer to process than others, which is typical when it’s in an understaffed position (the norm for several years). The IRS provides in-depth coverage of what’s new, in addition to an array of online tools and resources to help facilitate the filing process.

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Last Modified: March 2, 2023

5 Cited Research Articles

Annuity.org writers adhere to strict sourcing guidelines and use only credible sources of information, including authoritative financial publications, academic organizations, peer-reviewed journals, highly regarded nonprofit organizations, government reports, court records and interviews with qualified experts. You can read more about our commitment to accuracy, fairness and transparency in our editorial guidelines.

  1. Internal Revenue Service. (2023, January 25). Earned Income Tax Credit (EITC). Retrieved from https://www.irs.gov/credits-deductions/individuals/earned-income-tax-credit-eitc
  2. Internal Revenue Service. (2023, January 25). Steps To Take Now To Get a Jump on Your Taxes. Retrieved from https://www.irs.gov/individuals/steps-to-take-now-to-get-a-jump-on-next-years-taxes
  3. Internal Revenue Service. (2023, January 24). Child Tax Credit. Retrieved from https://www.irs.gov/credits-deductions/individuals/child-tax-credit
  4. Internal Revenue Service. (2023, January 23). Topic No. 602 Child and Dependent Care Credit. Retrieved from https://www.irs.gov/taxtopics/tc602
  5. Internal Revenue Service. (2022, December 30). Credits and Deductions. Retrieved from https://www.irs.gov/credits-and-deductions