With IRS Changes to Child Tax Credit, Your Refund Will Shrink. Here’s What You Can Do

With IRS Changes to Child Tax Credit, Your Refund Will Shrink. Here’s What You Can Do

You also don’t have to do anything to get the tax filing extension if you live in one of the nine Bay Area counties. “The IRS automatically provides filing and penalty relief to any taxpayer with an IRS address of record located in the disaster area,” the agency said in a February press release. “Therefore, taxpayers do not need to contact the agency to get this relief.”

With the worries of working-class families in mind, KQED spoke with the following experts about what parents and caregivers can expect when they file in 2023 — and how they can prepare for a potentially smaller return:

  • Jaqueline Marcelos, leader of the free tax clinic at MEDA
  • Amy Spivey, director of the UC Law Low-Income Taxpayer Clinic
  • Lindsay Rojas, tax specialist with United Way Bay Area

Prepare for a smaller return — and find free filing help

Tax filings are unique for every family, but the cuts on the child tax credit this year are universal. Parents will now receive a $2,000 credit for each child who is both their dependent and age 16 or younger (17 is no longer the upper age limit for the credit).

This means that a parent with two 5-year-old kids could see their refund diminish by at least $3,200. And some parents, UC Law’s Amy Spivey said, “might not receive any refund — they actually may have to pay the IRS.”

This has been especially frustrating for lower-income families in the Bay Area who benefited from large refunds last year to help offset the high cost of living. “It was a lot of money that came in,” MEDA’s Marcelos said. “And now this year, boom, no money.”

Marcelos has even had conversations with clients who insist the smaller returns are a mistake, and that they’d rather file with a private tax filer, whom they believe could get them bigger returns. “So many clients say, ‘I am going to report that I donated $50, $60, or I want to put down this expense, and I am going to request an extra form in my taxes,” Marcelos said — adding that, yes, a private filing company can write off what a client asks for, “but that [still] might not increase the amount of money that you’re getting back.”

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