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Level 1
posted Jan 23, 2023 7:00:50 AM

The IRS and South Carolina both lowered tax tables for payroll checks. Is amount expected when filing 2023 going to be lower? Or the same based on any changes to #s?

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1 Best answer
Expert Alumni
Jan 23, 2023 8:31:26 AM

It depends.  The withholding tables are adjusted as the tax brackets expand or contract based on inflation.  Ideally, those adjustments complement each other and the refunds stay about the same.  From tax year 2021 to tax year 2022 the tax bracket ranges expanded due to inflation.  That means a person who made a bit more due to inflation would stay in the same bracket.  The withholding table also adjusted so that withholding rate didn't increase because of an inflationary increase  in income.  

 

However, for those who made the same wages the withholding rate might have decreased because the lower range expanded to now include them.  Again, ideally they would now be in the lower tax bracket which expanded to include them as well.  

 

Having said all that there are several other factors that affect a change in tax refunds year over year.  Items like a change in credit amounts or changes in qualifications for a credit, and the changes in the standard deduction all affect refund amounts.  

 

Click here for a link with more details refund amount changes. 

1 Replies
Expert Alumni
Jan 23, 2023 8:31:26 AM

It depends.  The withholding tables are adjusted as the tax brackets expand or contract based on inflation.  Ideally, those adjustments complement each other and the refunds stay about the same.  From tax year 2021 to tax year 2022 the tax bracket ranges expanded due to inflation.  That means a person who made a bit more due to inflation would stay in the same bracket.  The withholding table also adjusted so that withholding rate didn't increase because of an inflationary increase  in income.  

 

However, for those who made the same wages the withholding rate might have decreased because the lower range expanded to now include them.  Again, ideally they would now be in the lower tax bracket which expanded to include them as well.  

 

Having said all that there are several other factors that affect a change in tax refunds year over year.  Items like a change in credit amounts or changes in qualifications for a credit, and the changes in the standard deduction all affect refund amounts.  

 

Click here for a link with more details refund amount changes.