In case you didn’t know, the federal government sent out three rounds of “Economic Impact Payments” over the course of the pandemic, including a $1,400 payment last spring as part of the American Rescue Plan (ARP). These payments were made available for single filers earning under $75,000 and families earning under $150,000. But, after reading below, this says that the Federal Government loaned your money BACK to you.
Fox Business reported on this about the tax season this year as some points to know about.
As many people point out, your tax refund is just an interest-free loan you give to the government throughout the year. Despite this fact, many families use tax refunds as an opportunity to fulfill important financial obligations, like putting a down payment on a new vehicle, planning for a family vacation, or renovating their home.
As part of the ARP, the size of the child tax credit increased from $2,000 to $3,000 for older children and to $3,600 for younger children. These payments also started going out on a monthly basis and were made available to all households with children. Typically, households claim the entire credit at tax filing season, but this past year, families received up to half of their child tax credit in advance.
If you received those advanced payments throughout the year, that may impact the size of your refund. Some families may have a larger refund if they had never received the credit before. If you received the full child tax credit in prior years, it may lead to a smaller refund because a part of the credit was already sent out last year
This does not mean that your taxes were raised or that you are missing out on potential tax benefits. It simply means that funds that you were used to receiving as part of your annual refund were distributed to you earlier and in smaller sums.
Key point, your “tax refund” is just “your money” you ALREADY GAVE to the government, only to be given back to you, where it’s considered your income and it’s taxed again.
How fucking stupid is this?