Millions of Americans will have a difficult holiday season in 2022 since they already have a lot going on financially with the rising cost of living. Spending less is a possible solution. Another is to look into receiving financial assistance from the government.
In particular, if you haven’t yet submitted your 2021 federal income tax return, you may be eligible for free government money from a number of programs depending on your income and household size.
More than 9 million US individuals and families who might be eligible for tax benefits but failed to claim them by filing a 2021 return received letters from the IRS in the middle of October.
Many people in this group may be qualified to receive all or part of the 2021 Recovery Rebate Credit, the increased Child Tax Credit, the Earned Income Tax Credit, and other tax credits, depending on their individual and family circumstances.
Use the IRS.gov/freefile platform, which enables taxpayers with yearly incomes of $73,000 or less to file a return online for free, to claim these benefits before November 17, 2022.
Additionally, you can research any active government initiatives that could reduce your debt or offer financial support. Here are a few scenarios in which you can be eligible for free money.
Earned Income Tax Credit
In order to aid low- and moderate-income families with children, this credit was also enlarged as part of the American Rescue Plan, much like the CTC. According to the IRS, the maximum credit for workers without qualifying children is $1,502, the maximum credit for those with one kid is $3,618; for two children, the maximum credit is $5,980; and for three or more children, the maximum credit is $6,728. To claim an extension, you must submit a return by November 17th.
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Child Tax Credit
Even if they received monthly advance payments during the second half of 2021, eligible families can still claim the enhanced Child Tax Credit from the previous year. The maximum credit amount per child is $3,600, but you have until November 17 to submit your federal tax return.
Child and Dependent Care Credit
Families can receive a tax credit of up to $4,000 for one qualifying person and $8,000 for two or more qualifying adults who pay for daycare so that they can work or look for work. In addition, a 2021 tax return is required.
Recovery Rebate Credit
The RRC, sometimes known as a stimulus payment, may be available to you if you were not chosen for the third round of Economic Impact Payments from the previous year. The credit may not exceed $1,400 for any one qualifying adult, anyone eligible child, or anyone eligible adult dependant. A 2021 tax return must be submitted once more.
Student Loan Forgiveness
In 2020 or 2021, individuals with yearly salaries under $125,000 and households with less than $250,000 in income are eligible for up to $10,000 in debt cancellation through President Joe Biden’s federal student loan forgiveness program.
Recipients of Pell Grants are eligible for debt cancellations of up to $20,000. Applications have been put on hold as a result of legal actions to end the program. While waiting for the program to be approved, the Biden administration has started sending out acceptance letters.
Student Loan Refund Checks
Some borrowers of federal student loans are already receiving refunds while the majority of borrowers watch the various court issues play out. Some borrowers of student loans who paid them off after the pandemic stop went into force in March 2020 are receiving checks in the mail.
Between March 2020 and December 2021, an estimated 8.8 million persons made at least one payment despite the pandemic hiatus. Borrowers must submit their student loan debt relief applications, but collecting an eligible payment return requires no further effort.
Temporary Assistance for Needy Families (TANF)
When parents or other responsible family members are unable to take care of the family’s basic necessities, this program offers financial support to families with children. For each state to administer the TANF program, the US Department of Health and Human Services (HHS) gives a grant.
Emergency Rental Assistance
Under the ERA1 and ERA2 programs of the US Treasury Department, you may be eligible for assistance with rent or utility payments. States, US territories, municipal governments, and Native American tribes receive money directly.
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