As the holiday season approaches, many Americans are looking for ways to ease the financial strain that often comes with the festivities. For those under 40, there’s good news: the U.S. Internal Revenue Service (IRS) is offering a special benefit this Christmas.
While this is not a universal payment for all Americans, eligible individuals under 40 may qualify for tax relief or direct financial assistance. So, how can you claim these benefits, and are you eligible? Here’s what you need to know.
What Is the IRS Benefit Available This Christmas?
The IRS provides a variety of benefits throughout the year, but during Christmas, some targeted tax relief programs and credits are available to help lower-income or middle-class Americans, especially those under 40. These benefits might include tax credits, refunds, or relief under specific government programs.
One of the key benefits that could impact individuals under 40 is the Earned Income Tax Credit (EITC), which helps low- to moderate-income workers reduce their tax burden. Additionally, if you qualify, there may be Child Tax Credits or Recovery Rebate Credits from past stimulus payments that you may not have yet claimed. These benefits can make a significant difference, especially as people face increased holiday spending.
1. Earned Income Tax Credit (EITC)
The Earned Income Tax Credit is one of the most well-known IRS benefits for working individuals, particularly for those with lower incomes. While traditionally associated with individuals over 25, the EITC is also available to those under 40. However, the amount of the credit varies depending on income, the number of dependents, and your filing status.
For the 2024 tax year, single individuals or married couples under 40 can qualify for the EITC if they meet income criteria. For example, the maximum income threshold for a single filer with no children could be up to $17,000, while the threshold for those with children can go much higher. The EITC can significantly reduce the amount of taxes owed and may even result in a refund if your credit exceeds your tax liability.
How to Get It:
To claim the EITC, you’ll need to file a tax return for the year in which you qualify (in this case, your 2024 tax return). You do not need to owe taxes to claim the credit, but you must file a return to be eligible for the benefit. Be sure to check the IRS website or speak with a tax professional to understand if you qualify for the EITC.
2. Child Tax Credit
If you are under 40 and have children, the Child Tax Credit may also be available to help ease the financial burden this holiday season. In 2024, the Child Tax Credit provides a significant benefit for parents of qualifying children under the age of 17. For many families, this credit can provide up to $2,000 per child.
How to Get It:
The Child Tax Credit is generally claimed when you file your tax return, and the amount you can receive depends on your income, your filing status, and the number of qualifying children in your household. If you qualify, a portion of the credit may be refundable, meaning you could receive part of the credit as a refund, even if you don’t owe taxes.
3. Stimulus Rebate or Recovery Credit
Though the pandemic-related stimulus checks have ended, there’s still a chance that some individuals under 40 may be eligible for Recovery Rebate Credits. These credits are available for those who missed out on one or more stimulus payments, either because they didn’t file taxes, had a change in income, or faced issues with their eligibility status in previous rounds.
How to Get It:
If you are eligible for a Recovery Rebate Credit, you can claim it when filing your 2024 taxes. This is particularly important if you didn’t receive the full amount of stimulus payments or if your financial situation changed. The IRS will help calculate whether you qualify for any missed payments or credits.
4. IRS Tax Refunds
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The holiday season is also a time when many Americans receive their tax refunds from the previous year. For those under 40, especially those with children or who have made major life changes (like getting married or buying a home), filing your taxes and claiming any eligible credits can result in a substantial refund.
How to Get It:
You’ll need to file your tax return for 2024, and if you’re eligible, the IRS will issue a refund, typically via direct deposit or paper check. If you’re not sure about the status of your refund or if you’re missing any credits, check the IRS’s “Where’s My Refund?” tool online to get up-to-date information.
5. Other Benefits and Tax Relief Programs
In addition to the above benefits, there are other relief programs that may help individuals under 40 during the holiday season. These could include:
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- Student Loan Forgiveness or Relief Programs: If you have student loans, some programs may offer temporary relief or forgiveness, which could help improve your financial situation.
- State or Local Tax Benefits: Some states offer specific credits or payments to residents, including young adults, during the holiday season. Be sure to check with your state’s tax authority to see if any benefits are available to you.
- IRS Payment Plans: If you owe taxes, the IRS offers payment plans and relief options to help individuals under 40 manage their debt more effectively.
How to Claim Your IRS Benefits This Christmas
To ensure you’re eligible for and can claim any of these IRS benefits, follow these steps:
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- File Your Taxes: The most important step to receive any IRS benefit is to file your taxes. If you haven’t filed yet for 2024, do so as soon as possible.
- Double Check Your Eligibility: Review the IRS guidelines for benefits like the EITC, Child Tax Credit, and Recovery Rebate Credit to ensure you meet the criteria.
- Use IRS Resources: The IRS website offers numerous resources to help you determine what benefits you’re eligible for. Tools like the EITC Assistant can help estimate how much you could qualify for.
- Consider Professional Help: If you’re unsure about your eligibility or need assistance filing your taxes, consider working with a tax professional who can guide you through the process.
Conclusion
This Christmas, those under 40 could receive valuable IRS benefits that provide financial relief during the holiday season. Whether you qualify for the Earned Income Tax Credit, the Child Tax Credit, or other relief programs, it’s essential to file your taxes and explore all available benefits.
Taking the time to understand your eligibility and claiming these benefits could make a big difference, helping you enjoy a more comfortable holiday season.