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Brace yourself, there are big changes coming your way this tax season.  Many of the generous pandemic benefits have expired, so you may see a smaller refund when you file in 2023.  Here’s what you need to know to get ready for the filing season.

Federal

  • The standard deduction has increased – for married filing jointly taxpayers (and qualifying surviving spouse), it is $25,900 for the 2022 tax year. For single filers (and married filing separately) it’s $12,950. For taxpayers filing as head of household it’s $19,400.
  • The Additional CTC has gone up, it is now a maximum of $1,500 per child (was $1,400).
  • The Standard Mileage Rate has increased, and there are two separate rates for 2022.
  • The Federal Educator Expenses deduction limit increased to $300 ($600 for joint filers). Was previously $250 ($500).
  • Child Tax Credit has changed – The age for qualifying children is back to being under 17 (was under 18 for Tax Year 2021).  The refundable portion of the Child Tax Credit has expired. Once again, only the Additional Child Tax Credit is refundable.  The maximum CTC is back to being $2,000 per child (was $3,600/$3,000).
  • Earned Income Credit has changed – If you don’t have a qualifying child, you need to be between the ages of 25 and 65 to claim EIC. The maximum credit for taxpayers with no qualifying child has gone down.
  • The credit for child and dependent care expenses has changed – The credit is back to being fully nonrefundable. The maximum qualifying expenses amount has gone back to being $3,000 for one qualifying person and $6,000 for two or more qualifying persons (was $8,000 and $16,000). The maximum credit percentage has gone back to 35% (was 50%).
  • The recovery rebate credit has expired.  You can no longer claim the recovery rebate credit on your taxes if you didn’t receive the full third Economic Impact Payment (stimulus).
  • For tax year 2022, charitable contribution deduction is no longer allowed if a taxpayer takes the standard deduction.
  • The deadline for filing your 2022 tax return is April 18, 2023.
  • Qualifying widower is now called qualifying surviving spouse.

States

Arkansas

  • Arkansas has a new Additional Tax Credit for Qualified Individuals worth up to $60.
  • There’s a new Inflationary Relief Income Tax Credit worth up to $150 ($300 for joint filers).

Colorado

  • Colorado has a new Child Tax Credit.  The credit amount is based on the federal Child Tax Credit/Additional Child Tax Credit.
  • There’s a new Early Childhood Educator Income Tax Credit worth up to $1,500. 
  • The Colorado Income Qualified Senior Housing Credit is worth up to $1,000.

Georgia

  • Georgia has a NEW Exemption for Unborn Children with a detectable Heartbeat.  It’s a $3,000 deduction per unborn child.
  • Georgia has a NEW military retirement exclusion.  It’s an exclusion of up to $17,500 of military income (up to $35,000 if they have earned income of more than $17,500).

Maryland

  • New Senior Tax Credit – A nonrefundable tax credit is equal to (1) $1,000 for an individual or if only one of the individuals filing a joint return is an eligible individual; and (2) $1,750 if married filing jointly and both individuals are at least age 65 and (3) $1,750 for surviving spouse and head of household.
  • New senior taxable income subtraction – A reduction of taxable income up to $100,000. 
  • Retired Forest/Park/Wildlife Ranger – Pension exclusion up to $15,000 of pension and retirement annuity income, limited by $34,300 social security income. 
  • Public safety employee – Retired Correctional Officer, Law Enforcement Officer, or Fire, Rescue, or Emergency Services Personnel (renamed as public safety employee) Pension Exclusion no longer limited by $34,300 Social security income.

Michigan

  • Michigan has a new First-Time Homebuyer Savings Program deduction (Form 5792).  MI taxpayers can deduct up to $5,000 ($10,00 for MFJ) plus interest for contributions made to a first-time home buyer savings account.  

New Jersey

  • NJ Child Tax Credit (New) – A refundable NJ Child Tax Credit for any dependents under the age of 6 (born in 2017 or later). Credit amount is up to $500 per qualifying child, depending on NJ taxable income amount.  
  • NJ EIC – NJ is continuing to allow a NJ EIC $224 (was $601 last year) for those age 18 and older who did not qualify for fed EIC only because of age.   
  • New deduction – Taxpayers get a deduction of up to $10,000 for contributions made to a NJBEST (NJ Better Educational Savings Trust) account.
  • New deduction – Taxpayers get a deduction of up to $2,500 for principal and interest paid during the year on an NJCLASS (NJ College Loans to Assist State Students) loan.
  • New deduction – Taxpayers get a deduction of up to $10,000 for tuition costs paid to a NJ institution of higher learning.

Ohio

  • Increased maximum contributions to MSA.  The cap on medical savings account contributions increased from $4,963 to $5,215. 

Pennsylvania

  • Child and Dependent Care Enhancement Program (New Credit) – Up to $650 or 30% of federal child and dependent care expense credit.

South Carolina

  • Military Retirement Deduction Threshold Change – In 2022, all military retirement income included in SC taxable income (not subject to early distribution penalty) is deductible, no longer limited to $17,500. 

Virginia

  • Virginia has a new refundable EIC.  It is worth 15% of federal EIC.  Previously, VA taxpayers might be eligible for a nonrefundable low-income tax credit or nonrefundable VA EIC.  For 2022-2026, VA taxpayers are now also eligible for a refundable EIC.  Only one of these credits can be claimed.   
  • Virginia has a new military retirement income subtraction for taxpayers aged 55 or older.  You can subtract up to $10,000 in 2022, $20,000 in 2023, $30,000 in 2024 and $40,000 in 2025 and later.  

Washington

  • We’re now supporting the Washington State Working Families Tax Credit.

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