There are several changes for tax year (TY) 2022 that may impact any refund you receive in 2023.
Along with changes in the number of dependents, employment/self-employment income, divorce, and other life factors, the IRS has outlined other items taxpayers should be aware of when filing their tax returns.
- There were no additional stimulus payments in 2022, so taxpayers should not expect to get an additional payment in their 2023 refund.
- Some tax credits return to 2019, pre-COVID-19 levels. These changes could mean taxpayers will receive a smaller refund than the previous tax year. Changes include amounts for:
- No above-the-line charitable deductions. For TY 2022, taxpayers who don’t itemize and take the standard deduction won’t be able to deduct charitable contributions.
- More people may be eligible for the Premium Tax Credit. Remember: simply meeting income requirements does not mean a taxpayer is eligible for the premium tax credit.
- Eligibility rules changed to claim the Clean Vehicle Credit.
Visit the IRS’s Credits and Deductions page for more details.
IRS Postpones Implementation of $600 Form 1099-K Reporting Until 2024
On December 23, 2022, the IRS issued Notice 2023-10 delaying the implementation of new reporting requirements for electronic payment networks to report transactions over $600 to the IRS on a Form 1099-K, Payment Card and Third Party Network Transactions, until 2024.
The Notice creates a transition period of one year, postponing the $600 Form 1099-K threshold until the January 31, 2024, reporting date. In essence, the IRS is taking the rules back to the pre-March 2021 threshold ($20,000 and 200 transactions) for any calendar year beginning before January 1, 2023. The lower reporting threshold (any number of transactions totaling $600) remains in effect for calendar years starting after December 31, 2022.
This one-year delay does not apply to any of the other Form 1099-K rules not modified by the American Rescue Plan Act. In addition, the rules for reporting income are not changing. Anybody receiving taxable income through third-party networks must still track and report their taxable income.
Read the NTA Blog for more details of this ruling.