This article outlines the Tax Law Changes for Tax Year 2022.
Tax Law Changes for 2022
Educator Expense Deduction
Increased to $300 ($600 if MFJ and both educators)
Standard Business Mileage Rates
58.5 cents per mile (Jan – June)
62.5 cents per mile (July – December)
Standard Deductions Adjusted For Inflation
Provisions That Revert to Prior 2021 Rules
Child Tax Credit
Child tax credit reverts to the $2,000 maximum amount ($1,500 refundable Additional Child Tax Credit)
Qualifying children must be younger than 17 on December 31st of the tax year
Earned income requirement returns ($2,500)
Child and Dependent Care Credit
Reverts to nonrefundable credit status
Credit worth up to 35% of qualifying expenses for taxes with AGI under $15,000
Maximum qualifying expenses are $3,000 (one qualifying person), $6,000 (two or more qualifying persons)
Recovery Rebate Credit/Stimulus Payments
Not available for tax year 2022
Earned Income Credit
Age limits for taxpayers claiming EIC without children return to 25-65
Inflation Reduction Act Provisions That Apply To Tax Year 2022
Alternative Fuel Vehicle Refueling Property Credit (Form 8911)
Maximum credit $1,000 (personal residence), $30,000 (business)
Available for qualified alternative fuel vehicle refueling property installed tax years 2022-2032
Extended through tax year 2032
Plug-In Electric Drive Vehicle Credit (Form 8936)
New rules do not take effect until 2023
Manufacturing caps still exist
Third-Party Network Transactions (1099-K) Reporting Requirements
As of December 23, 2022 the IRS has delayed the new $600 limit to Tax Year 2023.
Beginning with tax year 2023, individuals who receive $600 or more through a third party network transaction will receive Form 1099-K (this was intended to be 2022 but IRS has delayed to tax year 2023)
This includes apps such as Venmo, Uber, Lyft, Cash App, Zelle, PayPal, E-bay, etc.
Taxpayers must report Form 1099-K on their tax return as income if the funds were received for the sale of goods and services
If amounts on Form 1099-K are incorrect the taxpayer should contact the issuer
For a full list of limits and dollar amounts adjusted for inflation in tax year 2022, refer to the Tax Toolkit.