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Half of millennials depend on tax refund to make ends meet: Survey
Tax refunds have become a financial lifeline for many Americans, and according to a new report, half of millennials depend on their refunds to make ends meet.
A recent Credit Karma survey found that 37 percent of taxpayers rely on their refund to get by, rising to 50 percent among millennials. Nearly half of those respondents who count on their refund said it’s because of the rising cost of living and necessities.
For many, tax season can’t come soon enough. A third of those surveyed said they would pay a fee, or plan to pay a fee, to access their tax refund early. And nearly half, 47 percent, plan to use their refund to pay down debt, which rises to 59 percent for millennials, per the survey.
The 2025 tax filing season kicks off Monday, Jan. 27, and the federal deadline is Tuesday, April 15.
According to the latest IRS data, the average federal tax refund in 2024 was $3,138.
While receiving a big refund check can feel good, it also means you overpaid during the year, essentially giving the government an interest-free loan.
If you’re consistently getting a sizeable refund, it’s worth looking at how much money is being withheld from your paycheck. You can adjust your withholding by completing a new W-4 form with your employer.
The IRS has a federal tax withholding calculator to help you figure out how much should be withheld from your paycheck.
Last year, the government issued nearly 105 million refunds totaling roughly $330 billion.
Tax season has others feeling stressed
Others are less excited about tax season and willing to go to extreme lengths to avoid filing.
Nearly a fifth of millennials, 18 percent, said they would rather drive 20 hours straight, according to the Credit Karma survey. Almost as many, 15 percent, said they would take a vow of celibacy for one year to avoid filing their taxes.
“Whether you’re expecting a refund this year or you think you might owe money, my number one tip is to make a plan and leverage the plethora of online resources and tools that can help you do things like estimate how much you might owe or receive, as well as ways to access your refund early, at no cost,” Courtney Alev, consumer financial advocate at Credit Karma, said in a statement.
This Credit Karma survey was conducted online by Qualtrics from Dec. 20, 2024, to Jan. 4, 2025, and included 1,000 adults who plan to file their taxes this tax season.
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According to a recent survey, half of millennials rely on their tax refunds to make ends meet. This highlights the financial struggles that many young adults are facing in today’s economy.
The survey found that 50% of millennials use their tax refund to cover essential expenses such as rent, groceries, and bills. This reliance on tax refunds underscores the challenges that this generation is facing when it comes to saving and budgeting.
Many millennials are struggling to make ends meet due to factors such as student loan debt, rising housing costs, and stagnant wages. The need to rely on a lump sum of money from their tax refund to cover basic expenses is a clear indication of the financial strain that many young adults are under.
As tax season approaches, it is important for millennials to plan ahead and budget wisely to ensure that they are not solely dependent on their tax refund to make ends meet. Finding ways to increase income, reduce expenses, and save money throughout the year can help alleviate some of the financial stress that comes with relying on a tax refund for financial stability.
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millennials, tax refund, financial stability, survey findings, money management, budgeting, financial dependence, tax season, financial planning, millennial finances, financial support, financial survey
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