According to The Sun, Americans may soon receive checks worth thousands of dollars, contingent on meeting specific criteria related to the Earned Income Tax Credit (EITC). This direct payment opportunity arises from an “inflation adjustment” rule implemented by the Internal Revenue Service (IRS).
IRS Inflation Adjustments Confirmed
On Tuesday, the IRS announced adjustments for the 2025 tax year, which will affect residents when they file their returns in early 2026. Among the notable changes is the Earned Income Tax Credit, a refundable credit designed to support low and moderate-income individuals and couples, particularly those with children.
Eligibility Criteria for EITC
To qualify for the EITC, filers must meet several essential requirements, which are expected to remain largely similar for the 2025 tax year with slight adjustments in income thresholds. For the 2023 tax returns, applicants needed to adhere to the following criteria:
- Earned annual income of no more than $63,398
- Investment income of less than $11,000
- A valid Social Security number by the deadline for 2023 returns
- U.S. citizen or resident alien status for the entire year
- No filing of a Foreign Earned Income form
- Compliance with specific rules if separated from a spouse
Increased Benefits for Families
Those who meet these six criteria and have three or more children claimed as dependents could potentially earn $8,046 in EITC due to the inflation adjustment. This represents a significant increase from the $7,830 available for the 2024 tax year, marking a total difference of $216.
Also read: Social Security Payments in 2025: Key Dates and Requirements for Retirement Benefits
Eligible Americans can expect to receive this amount in a check or direct deposit around the same time they would typically receive their tax return for the 2025 tax year. Additionally, qualifying single filers and those with varying numbers of dependents will also see increased benefits.
Other Adjustments from the IRS
In addition to the EITC, several other categories have been positively adjusted for the 2025 tax year due to inflation, including:
- Alternative minimum tax exemption amounts
- Qualified transportation fringe benefits
- Health flexible spending account limits
- Medical savings accounts
- Foreign earned income exclusion
- Estate tax credits
- Annual exclusion for gifts
- Adoption credits
Notably, personal exemptions, itemized deductions, and lifetime learning credits will remain unchanged.
Additional Resources and Options
For further information regarding the new amounts and eligibility, taxpayers are encouraged to visit the IRS website. Additionally, there are at least six ways to file taxes for free, which may help individuals navigate their tax obligations more easily.
Moreover, some taxpayers may also be eligible to claim a portion of a $14.95 million settlement related to a privacy issue, providing another potential financial benefit.
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