Survey: 50% of millennials rely on tax return to make ends meet
LOS ANGELES - As tax season begins, a new survey reveals the financial strain and stress many Americans face. While millions rely on refunds to cover essentials, younger generations and the self-employed report feeling overwhelmed by the complexities of filing taxes.
Half of millennials depend on their refunds to make ends meet, often citing maxed-out credit cards (26%) and the need to pay down high-interest debt (23%). For Gen Z, job losses or reduced hours are major factors, with 18% highlighting income struggles as a reason for their reliance on refunds.
At the same time, filing taxes is a significant source of stress. Nearly 45% of Gen Z and 46% of self-employed taxpayers say filing is more stressful than paying, with procrastination common due to fears of mistakes, audits, or complexities in their financial situations.
Why are so many Americans dependent on tax refunds?
By the numbers:
Tax refunds are more than just an annual windfall for millions of Americans—they’re a critical tool for staying afloat financially. Rising costs of living, inflation, and mounting debt have left many dependent on their refunds to cover essential expenses or regain financial stability. Here’s a breakdown of what’s driving this reliance:
37% of Americans rely on tax refunds as a financial lifeline.
- 45% point to rising costs like housing and groceries as the main reason.
- 41% blame inflation, and 37% cite living paycheck-to-paycheck.
Millennials face a significant debt burden:
- 26% have maxed out their credit cards.
- 23% plan to use refunds to pay down high-interest debt.
Gen Z struggles with student loans:
- 37% are carrying student loan debt.
- 1 in 3 say they’d rely less on their refunds if it weren’t for these loans.
When it comes to refund usage:
- Nearly 47% of taxpayers plan to pay down debt, including 59% of millennials.
- 40% of taxpayers plan to save their refunds, often to rebuild depleted savings or prepare for emergencies.
- While 27% plan to splurge on non-essentials like travel or shopping, most see their refunds as a tool for financial recovery.
FILE - A tax payer looks at his rebate check July 25, 2001 in New York City. (Photo by Spencer Platt/Getty Images)
Why is filing so stressful for Gen Z and self-employed Americans?
Big picture view:
For Gen Z taxpayers, filing taxes sparks fear and procrastination. 26% avoid filing because they don’t want to know how much they owe, while 25% believe filing late reduces their chances of being audited.
Many also worry about mistakes, with 22% fearing tax fraud and 16% concerned about missing out on refunds due to errors.
For the self-employed, the stress stems from the complexities of their finances. 44% delay filing because it takes time to gather necessary information, and 18% worry about paying their tax bills on time.
What about Americans who owe the IRS?
Not everyone will receive a refund this tax season. Nearly 49% of taxpayers expect to owe the IRS, and 27% are worried about affording their tax bill. Among Gen Z, 40% anticipate taking on new debt to pay taxes.
Additionally, nearly 24% of taxpayers expect their refunds to be withheld due to delinquent federal debts, such as student loans or child support. This issue disproportionately impacts 35% of Gen Z and 34% of millennials.
The Source: This article is based on a survey conducted by Qualtrics on behalf of Intuit Credit Karma between December 20, 2024, and January 4, 2025, with responses from 1,000 U.S. adults aged 18 and older who plan to file taxes this season.