Indiana taxpayers could see smaller refunds this tax season

INDIANAPOLIS — If you’re expecting a big refund check this tax season, you might be disappointed.

According to the Internal Revenue Service, many Indiana taxpayers could see their refunds decrease by a few hundred to a few thousand dollars.

That’s because the federal government did not hand out COVID-related stimulus checks in 2022, which some taxpayers received as a credit on their tax returns.

"That was getting added to your refund, whereas this year that won't be happening,” said Michael Jamison, a certified public accountant and president of On Target CPA in Indianapolis.

Child tax credits have also expired, which will impact tax return amounts.

"Last year they were able to get enhanced benefits in the form of child tax credits and child care credits for child care,” said Jamison. “Those credits are reduced this year, so that's why they might see a lesser refund.”

According to the IRS, the average refund last year was nearly $3,200. That was an increase from about $2,800 in 2021.

Your refund this year may more closely resemble your refund in 2019 or 2020, tax experts say.

WRTV Investigates found some Indiana taxpayers are still dealing with unresolved tax issues from previous tax years, including Judy Mohler of Carmel.

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Mohler’s father died in August 2020 and she’s trying to close his estate.

"We are still waiting on my father's 2020 refund, but it still has not come,” said Mohler. “I just want to get this issue resolved. You always have this issue out there."

WRTV Investigates contacted the IRS, which says it is aiming to improve customer service this tax season by adding 5,000 telephone operators as well as more in-person staff to assist taxpayers.

"We are staffed up and ready and can walk you through whatever issues you might have,” said Luis Garcia, a spokesperson with the IRS.

The IRS says even if you have an unresolved tax issue, file your taxes as your normally would this year.

“It's fine to file your return for this year,” said Garcia. “We ask people to be patient with us."

A new report from the National Taxpayer Advocate says the IRS will be starting the 2023 filing season in much better shape than the last two years.

The IRS began 2022 with an unprocessed paper backlog of 4.7 million original individual returns.

But by Dec. 23, the IRS had further reduced its unprocessed paper backlog of original individual returns to about 400,000, the report said.

“This significant reduction in the paper return inventory will enable the IRS to begin processing paper-filed tax year 2022 returns during the upcoming filing season,” read the report. “That contrasts with the previous two years, when the IRS was not able to process current-year returns until months after the filing season had ended.”

However, tax experts still warn against filing a paper return this tax season.

“Any paper file returns are taking a year to process,” said Michael Jamison, a certified public accountant and president of On Target CPA in Indianapolis. “Getting the forms, filling them out, and mailing them is really ill-advised because of the time it takes to process and the IRS will lose those sometimes.”

The deadline to file this year is April 18.

But keep in mind that is the deadline to file, not to pay, and if you owe money you could face penalties and interest after the deadline.

Tips for Filing Your Taxes

• Make sure you have all your documents before you file (W2s, 1099s, etc.)
• Otherwise, you may have to amend your tax return
• Use software like Free File to file electronically
• Use a free tax preparation site if you qualify
• Ask for direct deposit rather than a paper check

You can contact the Local Taxpayer Advocate in Indiana at 317-685-7840 or click here.

You’ll need to fill out a form to request assistance from the Taxpayer Advocate.