Uncle Sam is a bit stingier this year when it comes to refunds on Americans’ income tax returns.
The average refund check handed out to the 72 million Americans who filed their 2022 income tax returns as of March 17 was down 11%, according to figures calculated by the Internal Revenue Service.
The IRS figures were first cited by Bloomberg News.
According to the tax-collecting agency, the average refund payment was $2,993 — which is down 9.4% from $3,305 at the same time last year.
As of March 17, the federal government has paid out $158 billion in income tax refunds — which is down from $171 billion a year ago.
Experts told Bloomberg News that the change can be attributed to COVID-era government benefits being rolled back.
In 2021, the Biden administration increased the child tax credit from $2,000 to $3,600 for children under the age of six as part of the American Rescue Plan.
But the benefit was temporary and the administration’s attempts to extend it have failed to win support from Congress.
The smaller refunds come at an inopportune time for tens of millions of Americans who are struggling to make ends meet due to stubbornly high levels of inflation.
Prices increased 0.4% last month, just below January’s 0.5% rise.
Yet excluding volatile food and energy costs, so-called core prices rose 0.5% in February, slightly above January’s 0.4% gain.
When measured against prices a year ago, inflation has been easing for eight months. In February, consumer prices climbed 6% from 12 months earlier, down from January’s 6.4% year-over-year increase and well below a recent peak of 9.1% in June.
Yet it remains far above the Fed’s 2% annual inflation target. Core prices in February rose 5.5% from 12 months ago, down slightly from 5.6% in January.
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