WASHINGTON — Tax season is upon us again, but 2022 is expected to bring new wrinkles to the annual calculations.
For one, the season started early on Jan. 24. Last year, it started in February, but the Internal Revenue Service announced earlier this month that they would push it forward in an attempt to get ahead of problems caused by the coronavirus pandemic.
Chiefly among those problems is the fact that COVID-19, as well as the "great resignation" of employees, has left the IRS with a shortage of workers. As of the start of tax season, around 200 open positions were listed on the IRS recruiting website.
Tony Reardon, president of the National Treasury Employees Union that represents IRS workers, said the agency “has a hard time recruiting because they’re up against Burger King or McDonald’s,” which offer similar pay without requiring workers to “deal with confusing rules and regulations.”
The IRS said it expects some delays with processing tax submissions this year because of that shortage, and returns could be delayed as well.
“The pandemic continues to create challenges, but the IRS reminds people there are important steps they can take to help ensure their tax return and refund don't face processing delays,” IRS Commissioner Chuck Rettig said.
Another problem is a lack of funding. Legislation in Congress that would give the agency billions of dollars for processing returns faster has stalled, compounding the problems caused by COVID.
“The IRS right now has unacceptable backlogs and the customer service that people are receiving is not what the American public deserves,” White House press secretary Jen Psaki acknowledged Friday. “The agency has not been equipped with the resources to adequately serve taxpayers in normal times, let alone during a pandemic.”
How big is the holdup?
The IRS says it is still working through tax forms from 2020, when they processed more than 240 million returns. Experts expect the delays this year to stretch for weeks, if not months, for many Americans.
Deadlines to file have been extended in the past two years due to the pandemic. But so far, no extension has been announced this year.
And the system has only gotten more complicated over the course of the pandemic.
As well as the usual W-2 forms and other income-related statements, the IRS sent out several additional documents this month related to the advance child tax credit and the third stimulus check, officially called the third Economic Impact Payment. These letters -- 6419 and 6475, respectively — tell the taxpayer how much they received of each in 2021. Taxpayers can also check for the amounts they received on the website IRS.gov.
But recent changes could help filers this year, allowing them to receive more money in their return.
Anybody who bought personal protective equipment (PPE) used during the COVID-19 pandemic can write it off as a deduction if that equipment and other medical expenses were at least 7.5% of the filer's annual gross income (AGI). The purchases can't have been reimbursed by insurance to claim the deduction.
Taxpayers who welcomed a newborn into their homes in 2021 could also receive up to $5,000.
That extra money is a holdover from the child tax credit, which ended in December. Those payments were automatically sent to people in 2021 based on previous tax returns. But if a family added a child, they would have no reason to report it to the IRS until it was time to file taxes. In this case, that would be the 2022 tax season.
Under the child tax credit increase passed by Congress in 2021, parents with children up to age 6 were eligible for $3,600. Those with children ages 6-17 would get $3,000.
Presuming the parents fell within the income limits for the stimulus and the child tax credit, and the child joined their family before the start of 2022, then they could be getting up to $5,000 when they file. That's $1,400 from the Economic Impact Payment -- which must be claimed as a Recovery Rebate Credit -- and the full child tax credit amount.
The last day to file your taxes without an extension is April 18, 2022. An extension would grant a filer until Oct. 17 to file a return on their 2021 earnings.