Many U.S. taxpayers may feel “refund shock” when filing their 2022 returns. Even the IRS warns that refunds could shrink — after pandemic-era boosts roll back, your return may look different than expected.

Why Refunds May Shrink in 2022

Here are key changes that might reduce your refund:

Child Tax Credit Returns to $2,000

The child tax credit reverts from expanded pandemic levels down to its pre-2021 structure: $2,000 per child. That change alone can reduce the benefits many families expected.

Child & Dependent Care Credit Reduces

The child & dependent care tax credit (CDCTC) drops significantly. Where prior legislation expanded it, 2022 sees a reduction, limiting the maximum allowable benefit.

Earned Income Tax Credit Changes

In 2021, the EITC was expanded for taxpayers without children. In 2022, that expansion ends, and the credit for those without dependents reverts to $560, much lower than prior years.

No Above-the-Line Charitable Deductions

In 2021, even non-itemizers could deduct $300 (or $600 for couples) for charitable contributions. That deduction is no longer available in 2022, shrinking write-offs for many filers.

Personal Exemptions & Income Tax Rates

The personal exemption remains $0 (as it has since tax reform). The tax rate structure is unchanged — 7 brackets ranging from 10% to 37% — but adjusted thresholds may shift your bracket.

These changes may hit your refund more than you expect. If you want help assessing your situation or planning for next year, contact Grants Pass Tax Service for personalized assistance.