Yahoo Finance Frustrated by the student debt cancelation circus? Here are 4 more ways to get cash back from the U.S. government in 2023
As millions of Americans anxiously await an update on student loan debt cancelation, the fiery debate over its future smolders in Washington.
President Joe Biden announced his plans to cancel up to $20,000 in student debt for low- to middle-income Americans back in August 2022.
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Since then, the forgivness plan has received more than 26 million applications. While 16 million applications have already been approved, whether those borrowers will actually see their debts forgiven remains uncertain.
In November, the program was banned by a federal judge in Texas, forcing the U.S. Department of Education to stop processing applications until the legality of the program has been determined by the Supreme Court.
For now, Biden has extended a pause on federal student loan payments while the White House defends the debt cancellation program in court. But once the legal issue has been settled, payments will pick back up again within 60 days — or no later than the end of August 2023.
If you missed the student debt cancellation application window or are one of the 26 million Americans who have applied for debt forgiveness and are awaiting the Supreme Court’s decision, here are some other ways you can get cash back from the U.S. government in 2023.
Tax benefits for education
The American Opportunity Tax Credit (AOTC) helps with expenses during the first four years of higher education, with a maximum annual credit of $2,500 per eligible student. If the credit lowers your tax liability to zero, you could get a refund of up to $1,000.
Education is a good investment as college graduates and those with professional designations tend to earn more, according to Federal Reserve data.
A Lifetime Learning Credit (LLC) of up to $2,000 per tax return can be used for tuition payments and related expenses for undergraduate, graduate and professional degree courses. There’s no limit to the number of years you can claim the LLC — it’s a real boon for those looking for learning opportunities.
Electric vehicle credit
Ditching your gas-guzzler has never been more attractive. After a year of gas price fluctuations — including a 49% price hike between January to June 2022, according to Bureau of Transportation statistics — 2023 looks set to continue burning holes in the pockets of motorists, at least in the short-term.
“2023 is not going to be a cakewalk for motorists. It could be expensive,” Patrick De Haan, head of petroleum analysis at GasBuddy, told CNN. “The national average could breach $4 a gallon as early as May.”
Those of you who decided to buck the gas bills and buy a plug-in electric vehicle(EV) in 2022, or are planning to buy one this year, could be eligible for a clean vehicle tax credit of up to $7,500.
The 2022 EV credit breaks down to $2,917 for an EV with a battery capacity of at least 5 kilowatt hours (kWh), plus $417 for each kWh pf capacity over 5 kWh.
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Energy tax incentives
A little cost upfront can make a world of difference when it comes to the energy efficiency of your home. If you’ve already had that lightbulb moment and have made energy-saving home improvements, you can qualify for state, local, utility and/or federal tax incentives.
Residential Energy Credits help homeowners get cash back if they’ve purchased solar panels, solar water heaters, small wind turbines, geothermal heat pumps and fuel-cell equipment.
Heat pumps, in particular, have gained a lot of attention in recent months as a cost- and energy-efficient alternative to traditional electric baseboard heaters.
There are credits and rebates of up to $300 available for heat pumps installed in 2022, and for those making the investment in this year, the federal government has increased the maximum credit to $2,000.
Post-disaster tax relief
No one wants to be eligible for this tax relief — but with all the crazy weather the U.S. has experienced in recent years, it's a credit worth researching.
The IRS provides special tax help to people hurt by a major disaster or emergency.
In 2022, the tax agency announced 35 tax credits tied to federally declared disasters, including the deadly Category 4 Hurricane Ian in September and the historic lake-effect storm that battered Buffalo with up to 81 inches of snow in November.
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This article provides information only and should not be construed as advice. It is provided without warranty of any kind.
