3 Government Payouts Many Americans Don't Know About
Government payouts come in the form of tax credits, social programs and unclaimed funds, and many Americans don't know that they exist.
To help us uncover some of these government payouts, we asked Shelby Rothman, CFP and founder at EnJoy Financial, for her insights.
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Tax Credits
"There are many tax credits available to parents, including the child tax credit, earned income credit and dependent care credit," said Rothman. These credits can reduce the amount of taxes owed and even increase your tax refund.
The Internal Revenue Service (IRS) offers a list of credits you may be able to claim, including for those who:
Earn under a certain income level
Are a parent or caretaker
Pay for higher eduction
Put money into retirement savings
Invest in clean vehicles or clean home energy
Buy health insurance in the Marketplace
Qualify for other personal tax credits, such as paid taxes overseas or paid tax on undistributed capital gains
Rothman pointed to the earned income tax credit in particular as a common credit that people don't take advantage of. Additionally, she said that many states have established their own version to supplement the federal credit.
"Around 5 million eligible people do not claim the tax credit," she said, "resulting in around $7 billion in unclaimed benefits."
Social Programs
Rothman pointed out that there are a number of benefits available to low-income earners such as the SNAP food assistance program and Supplemental Security Income (SSI) for those with disabilities.
"For those struggling to afford expensive heating and cooling bills, the Low-Income Home Energy Assistance Program can help households lower their energy costs," she said.
Some of these programs are nuanced and come with benefits that people often miss.
"Medicaid, for example, can be an option for low-income workers and can even pay for some in-home care in retirement. This can also be an option for retirees who outlive their retirement expenses and require medical attention," Rothman added.
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Unclaimed Property
The National Association of Unclaimed Property Administrators (NAUPA) partners with state governments to assist in distributing unclaimed property. Unclaimed property refers to "abandoned" property and includes uncashed paychecks, customer overpayments, checking or savings accounts and even safe deposit box contents.
Using the site MissingMoney.com, you can look up your name to see if you have unclaimed property. Make sure to check each city you've lived in and search any previous names you've used. NAUPA estimates that one in seven people have unclaimed cash or property.
Rothman recommended speaking to an accounting professional or financial advisor to help you identify unclaimed funds, including tax credits and social program benefits. "It can be difficult to navigate the complicated processes and applications, and a professional can help you navigate this landscape," she said.
This article was provided by MoneyLion.com for informational purposes only and should not be construed as financial, legal or tax advice.
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