Get Your $8,046 Check: New Inflation Adjustment Rule Opens Doors for Americans!
According to The Sun, Checks worth thousands of dollars could be sent to eligible Americans, thanks to an “inflation adjustment” rule from the Internal Revenue Service (IRS). These adjustments, confirmed in a press release on Tuesday, will affect taxpayers during the 2025 tax year, specifically when they file their returns in early 2026.
Earned Income Tax Credit (EITC) Overview
One significant adjustment pertains to the Earned Income Tax Credit (EITC), a refundable credit designed to assist low- to moderate-income individuals and couples, particularly those with children. To qualify for the EITC, filers must meet several essential criteria, which typically include limits on income.
Crucial Eligibility Criteria
For the latest 2023 tax returns, the IRS established six critical requirements for EITC eligibility:
- Earned Annual Income: No more than $63,398.
- Investment Income: Less than $11,000.
- Valid Social Security Number: Must be held by the filer by the deadline for 2023 returns.
- U.S. Citizenship or Resident Alien Status: Must be maintained throughout the year.
- No Foreign Earned Income Form Filed: Filers cannot have submitted this form.
- Spousal Requirements: Specific conditions apply for those who are separated from their spouse.
These requirements are expected to remain largely the same for the 2025 tax year, with slight adjustments to the income and investment limits.
Increased Credit Amounts
Those who meet the six qualifications and have three or more children claimed as dependents could receive a significant increase in their EITC, amounting to $8,046 due to the inflation adjustment. This represents a notable rise from $7,830 for the 2024 tax year, reflecting a $216 difference.
Also read: Understanding Social Security: 2025 COLA Dates and Eligibility for Retirement Payments
Eligible Americans can expect to see this increased payment through checks or direct deposits around the same time they receive their tax returns for the 2025 tax year. Single filers and those with different numbers of dependents will also benefit from increased credit amounts.
Additional Inflation Adjustments
In addition to the EITC, several other categories will see increases due to the inflation adjustments for the 2025 tax year. These include:
- Alternative minimum tax exemption amounts
- Qualified transportation fringe benefits
- Health flexible spending cafeteria plans
- Medical savings accounts
- Foreign earned income exclusion
- Estate tax credits
- Annual exclusion for gifts
- Adoption credits
However, personal exemptions, itemized deductions, and lifetime learning credits will remain unchanged.
Resources and Free Filing Options
More details regarding these amounts and adjustments can be found on the IRS website. Taxpayers can also explore at least six ways to file their taxes for free. Additionally, some individuals may be eligible to claim a portion of a $14.95 million settlement related to privacy concerns.
