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Why Your Tax Refund May Be Bigger This Year

MARCH 31, 2022 - 1 MINUTE READ

According to the IRS, those who have already filed their taxes averaged $3,352 for the week ending March 11th. That is a 13% increase from a year ago and the largest average refund since 20101. Many Americans are still benefiting from the pandemic relief measures, as well as the expanded child tax credit.

 

The child tax credit for many was increased from $2,000 to as high as $3,600 for around 39 million eligible families2. The credit was also made fully refundable, which meant even if you didn’t owe enough in taxes to receive the full credit, you still got paid the full amount.

 

The hot labor market also played a role this, due to more people being employed in 2021 than in 2020 during the height of the pandemic. According to Time magazine, wages and benefits were up about 4%, the most in 20 years. More workers and increased wages generally means more money being withheld from paychecks, which then gets distributed as a bigger tax refund2.

Sources:

1https://www.irs.gov/newsroom/filing-season-statistics-for-week-ending-march-11-2022

2https://time.com/6144877/industry-pay-increases-2021/

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