Changes for Tax Year 2023

For a complete and thorough review of 2023 tax law changes, with examples, please see this video created by an ingenious woman (whose name I can't find) at the United Way.

For ease of access, the following are the updates that are most relevant to our site.

General Changes

Due date of return: April 15, 2024. Taxpayers in Maine or Massachusetts, have until April 17, 2024, because of the Patriots’ Day and Emancipation Day holidays.

Standard deduction amount increases are:

  • $13,850 - Single or Married filing separately
  • $27,700 - Married filing jointly or Qualifying surviving spouse
  • $20,800 - Head of household

    Child Tax Credit (CTC), the Additional Child Tax Credit and Credit for Other Dependents

    Pub 4012 Excerpt, CTC and Credit for Other Dependents Qualifications

    The only change to these credits for 2023 is an increase of the refundable portion from $1,500 to $1,600.

    Earned Income Credit

    Pub 4012 Excerpt, EITC Eligibility Requirements

    The only changes to the EITC for 2023 are to the income limitations and credit amounts, as follows.

    Your earned income and AGI must be less than:

      • $56,838 ($63,398 for married filing jointly) if you have three or more qualifying children,
      • $52,918 ($59,478 for married filing jointly) if you have two qualifying children,
      • $46,560 ($53,120 for married filing jointly) if you have one qualifying child, or
      • $17,640 ($24,210 for married filing jointly) if you don’t have a qualifying child.

    The maximum amount of credit for the 2023 Tax Year is:

      • $600 with no qualifying children
      • $3,995 with one qualifying child
      • $6,604 with two qualifying children
      • $7,430 with three or more qualifying children

    EITC reminders:

    • all TPs and qualifying children must have SSNs (not ITINs) to qualify. However, if the taxpayer’s Social Security card says “VALID FOR WORK ONLY WITH INS OR DHS AUTHORIZATION,” the taxpayer can use the Social Security number to claim EIC if they otherwise qualify. This may apply to our FSS clients!
    • Earned income = wages in Line 1 plus self-employment income. It is not AGI and does not include unemployment, workman's comp, or social security, among others. See pub 4012 p. I-1 for a full list.

    Required Minimum Distribution

    In late 2022, Congress passed legislation that raised the age you have to start taking RMDs from 72 to 73 years old starting in 2023. This means that if you turned 72 in 2022, you’ll need to take your first RMD by April 1, 2023 and will need to make another one by the end of 2023. If you turn 72 in 2023, you won’t have to take an RMD until the 2024 tax year (when you turn 73), which will be due by April 1, 2025.

    General Information

    How is my RMD calculated? The amount of your RMD is usually determined by the fair market value (FMV) of your IRA as of December 31 of the previous year, factored by your age and your life expectancy using the uniform life expectancy method. For more information, please see Publication 590-B

    For each year after your required beginning date, you must withdraw your RMD by December 31.

    For the first year following the year you reach age 72, you will generally have two required distribution dates: an April 1 withdrawal for the year you turn 72 and an additional withdrawal by December 31. You can make your first withdrawal by December 31 of the year you turn 72 instead of waiting until April 1 of the following year. This would allow the distributions to be included in your income in separate tax years.