The IRS recently released data for the 2022 tax filing season. This was calculated using tax returns filed for the 2021 tax year. According to IRS data from April 22, 2022, the average tax refund this year was 4.9 percent higher than the previous year. Money from the stimulus package could very well be the reason.
This is why.
Stimulus payments almost certainly resulted in increased tax refunds.
The IRS reports that the average refund in 2021 will be $2,870. However, by 2022, the average refund would have increased to $3,012. This represents a 4.9 percent increase in the amount of money returned to Americans by the IRS. These refunds are generally deposited directly into taxpayers’ bank accounts or mailed to them.
The most likely reason Americans are receiving more money from the IRS this year is that millions of people have unclaimed stimulus payments due in 2021. As an example, the Biden administration signed the American Rescue Plan Act into law last year. It made a number of direct payments to Americans, including:
A check in the amount of $1,400 per adult and eligible dependent
An increased Child Tax Credit of $3,600 per eligible child under the age of six, and $3,000 per eligible child over the age of six
These stimulus payments were structured in such a way that the majority of people received the full $1,400 payment deposited into their accounts or mailed to them last year, as well as half of the expanded Child Tax Credit.
However, individuals who added dependents in 2021; whose income changed to make them eligible when they were previously ineligible; or who failed to provide the IRS with recent tax returns received no payment. Anyone who was short the money was eligible to claim it during the 2022 filing season by filing a 2021 tax return. Additionally, all qualifying parents were eligible to claim the remaining half of their expanded Child Tax Credit that they did not receive last year.
Given that many people qualified for payments of up to $1,400 per eligible household member and many others qualified for at least half of the expanded tax credit, it’s unsurprising that tax refunds were higher this year than in recent years.
Are you eligible for additional IRS funds?
If you are one of the many Americans who were owed stimulus money and have already filed your taxes for 2021, you should have received or will receive your payment from the IRS. Whether you receive your money or not is contingent upon the date on which you filed your returns.
If you failed to file a tax return this year but owe money, it is not too late to file. You can still submit a 1040 form to the IRS requesting that they send you the payment you deserve.