Income Tax Season 2022: What To Know Before Filing In Maryland

MARYLAND — The 2022 tax season is under way, and as W-2s and other tax forms hit U.S. mailboxes, many in Maryland will wonder when they can file and what changes are in store for their returns this year.

The first day to file 2021 tax returns is Jan. 24, according to the Internal Revenue Service. That's two weeks earlier than last year.

As the Internal Revenue Service battles with staffing shortages, backlogs and aging technology, watchdog groups urge taxpayers to file their 2021 returns as far ahead of the Monday, April 18, tax deadline as possible. They should also file electronically.

Maryland Comptroller Peter Franchot announced last week the filing and payment deadline for 2021 Maryland state individual income taxes has been extended by three months — to Friday, July 15 — to help taxpayers facing financial difficulties due to the COVID-19 pandemic.

The extended filing and payment deadlines for state taxes are essentially a waiver of penalties and interest on outstanding liabilities.

“Many people are still struggling to stay above water, so giving taxpayers more time to file and pay will hopefully ease their financial pressure,” Franchot said in a news release. “As we approach the two-year mark of the onset of COVID-19, my agency remains as committed as ever to helping Marylanders who still are feeling the pandemic’s impact.”

The IRS already has warned of processing delays for the 2022 tax season due to COVID, but has not indicated any plans to extend the federal income tax filing and payment deadline beyond April 18.

This is the second year Americans will file tax returns that will likely look significantly different than in previous years due to the ongoing coronavirus pandemic. One of the largest changes that could affect returns this tax season is the expanded child tax credit payments received by many Americans.

Appointments at any of the comptroller’s 12 branch offices must be scheduled online in advance. Virtual appointments also are available. No walk-ins will be accepted. Masks are required in all branch offices, regardless of vaccination status.

Taxpayers can call 1-800-MD-TAXES or email taxhelp@marylandtaxes.gov. The agency’s branch offices and call centers are both open 8:30 a.m. – 4:30 p.m., Monday through Friday. Beginning February 1, the call center will remain open until 7 p.m., only for personal income tax assistance.

For questions abut federal taxes, visit www.irs.gov or call Taxpayer Advocate Service at 443-853-6000 or 877-777-4778 (outside the Baltimore area). You can also get federal tax help at seven Maryland Taxpayer Assistance Centers.

As always, taxpayers should file their returns electronically and use direct deposit for the fastest possible processing and to ensure they receive all possible refunds and to avoid continued delays with the United States Postal Service. A list of approved vendors for use in filing your electronic return can be found on the Comptroller’s website.

Maryland taxpayers also can use the agency’s free I-File system.

Before you file, here's everything you should keep in mind about the 2022 income tax season:

How will advance child tax credit payments affect my return?

Over the last six months of 2021, millions of families received monthly payments based on how many children were in their households as well as their ages. These first-ever advance child tax credit payments could affect your tax return in different ways, according to a report by Forbes.

First, filers will be required to report how much they received in payments. Depending on the amount of child tax credit payments received in 2021, filers may receive a bigger or smaller tax refund than expected. They may even owe additional taxes.

To figure out whether you owe additional taxes, the IRS will send out Letter 6419, which will state the total amount of child tax credit payments you received. You should compare this amount with the total child tax credit to which you're entitled.

If the total child tax credit for which you're eligible exceeds how much you received, you can claim the remaining amount on your 2021 tax return. If you received more than you qualify for, you will need to repay some or all of the excess payments when filing taxes.

The IRS has more answers to questions about advance child tax credit payments on its website.

What about the COVID-19 stimulus payment I got this year?

If you received a stimulus payment between March and December 2021, you will receive Letter 6475 from the IRS in early 2022, which shows the amount of your third stimulus payment. Do not throw this letter away. You will need it to claim the payment on your taxes.

Letter 6475 will also help determine whether you are eligible for the Recovery Rebate Tax Credit.
The Recovery Rebate Tax Credit worksheet will be used to request any additional payments you may be owed through your 2021 tax return. This is especially important if you didn't receive a stimulus payment or only received a partial payment.

If you're eligible for the Recovery Rebate Tax Credit but usually don't file a tax return, you will need to file this one in order to receive any owed funds.

Here's more on this year's economic impact payments and the Recovery Rebate Tax Credit.

What if I received unemployment benefits this year?

Unemployment was down significantly last year. Still, 25 million Americans filed for unemployment benefits in 2021, CNBC reported.

The American Rescue Plan Act passed in March waived federal tax on up to $10,200 of unemployment benefits, per person, collected in 2020; however, Congress hasn't passed a law offering a similar tax break on 2021 benefits.

This means if you collected unemployment benefits in 2021 and didn't withhold federal tax from benefit payments — or withheld too little — you may owe money this tax season.

If I donated to charity, do I have to itemize deductions?

Not necessarily. If you plan to claim the standard deduction on your 2021 tax returns, you can actually write off up to $600 in contributions to charities.

In 2020, a charitable-giving deduction of $300 was authorized under the CARES — Coronavirus Aid, Relief and Economic Security — Act. This year, however, the charitable deduction is more for those who file a joint return.

For 2020, the charitable limit was per "tax unit" — meaning that those who are married and filing jointly could only get a $300 deduction. For the 2021 tax year, those who are married and filing jointly can each take a $300 deduction for a total of $600.

Under the change, individual taxpayers can claim an "above-the-line" deduction of up to $600 in cash donations to qualifying charities in 2021. This means the deduction lowers both gross income and taxable income — translating into tax savings for those making donations to the qualifying tax-exempt organization.

Do I qualify for earned income tax credit?

The earned income tax credit exists to help middle- to low-income individuals and families reduce the amount of taxes they pay and can help them get more in refunds, according to the IRS.
The IRS has an online tool to see if you qualify for the credit.

What is the standard deduction for 2022?

The standard deduction is a dollar amount that reduces the amount of income on which you are taxed and varies according to your filing status.

The standard deduction for each filing status for the 2022 tax year has changed slightly from 2021, according to the IRS:

• Single or married filing separately: $12,950, up $400 from 2021.

• Married filing jointly or qualifying widow: $25,900, up $800 from 2021.

• Head of household: $19,400, up $600 from 2021.

Other federal changes for the 2022 tax year are listed here.

What are the tax brackets and thresholds this year?

• 10 percent — $0 to $9,950

• 12 percent — $9,951 to $40,525 for single filers ($20,550 for married couples filing jointly)

• 22 percent — $40,526 to $86,375 for single filers; ($83,550 for married couples filing jointly)

• 24 percent — $86,376 to $164,925 for single filers; ($178,150 for married couples filing jointly)

• 32 percent — $209,426 to $523,600 for single filers; ($340,100 for married couples filing jointly)

• 35 percent — $416,701 to $418,400 for single filers; ($431,900 for married couples filing jointly)

• 37 percent — $523,601 or more for single filers; ($647,850 for married couples filing jointly).

This story contains reporting by Patch Editor Caren Lissner.

This article originally appeared on the Annapolis Patch