Tax Updates End of May 2022

Interest Rates Increase

The IRS has announced that interest rates will increase for the third calendar quarter of the year, beginning July 1, 2022. The rates will be:

• 5% for overpayments (4% in the case of a corporation).
• 2.5% for the portion of a corporate overpayment exceeding $10,000.
• 5% for underpayments.
• 7% for large corporate underpayments. 

These rates are calculated by the federal short-term rate determined during April 2022, based on daily compounding.

Child Tax Credit FAQs Revised

The IRS has revised a set of frequently asked questions (FAQs) for the 2021 Child Tax Credit and Advance Child Tax Credit. Updates have been made to several topics, including general information, receiving advance child tax credit payments, updating your information, reconciling your payments, unenrolling from advance payments, shared custody questions and more. 

Where’s My Refund? Updated

The IRS has made a helpful improvement to the Where’s My Refund? online tool that now allows taxpayers to check the status of their current tax year and two previous years’ refunds. Taxpayers will need their Social Security number or ITIN, as well as filing status and expected refund amount for the tax year they’re checking. Previously the tool only displayed the status of the most recent tax return. The tool is usually updated overnight and gives a projected refund date as soon as it’s approved. 

Earned Income Tax Credit FAQs Revised

The IRS has revised the FAQs for the Earned Income Tax Credit (EITC). The EITC helps low- to moderate-income workers and their families either reduce their taxes owed or increase their refund (if no taxes are owed). The credit varies depending on whether the taxpayer has children, dependents, a disability or other eligible status. The FAQs explain the EITC, how it was expanded in 2021, which taxpayers are eligible, and how to claim it.