From Fidelity

Key takeaways

1. Federal rebates and tax credits may offer some relief from inflation and pandemic fallout.

2. Some states are giving tax rebates or hero pay for specific professions.

3. Some programs require applications, but others grant automatic rebates as long as you have filed your taxes on time.

Inflation may be cooling, but high prices are still everywhere, from the grocery store to the gas pump. There’s some good news: More relief could be on the horizon. Tax credits, state rebates, and even hero pay could mean more money in your pocket next year. Here’s a look at free money — and employer benefits that are like free money — that you could be entitled to in 2023.

1. Employer benefits

401(k) or 403(b) matches

If you have one of these retirement accounts through work, your employer might match your contributions as part of your compensation package. The amount they’ll match varies by organization, but it could be 50 cents or a dollar for each dollar you contribute, up to a certain percentage of your salary.

If you’re able, contribute at least enough to your plan to capture the full match, which is like free money. Whatever your employer adds to your retirement savings could mean more money for you in retirement.

Other pre-tax accounts

Do you have access to a flexible spending account (FSA) or health savings account (HSA)? They allow you to set aside tax-free money to pay for health care costs. Any withdrawals are also tax-free, as long as you use them to cover qualified medical expenses.

This helps you save for health-related expenses — such as doctor visits, medication, and more — that you’d already be paying for, but you get to save on the taxes when paying for them.

Similarly, if you commute to your workplace, you may be able to take advantage of a commuter benefit that allows you to use pre-tax dollars for eligible transit and parking expenses. Because there’s less overall income to tax, it’s like getting a discount to buy train and bus tickets and parking passes.


Your employer might offer to pay you back for a portion of wellness and education expenses, such as gym memberships and tuition costs. Check out what your company reimburses and if that includes expenses you’d incur anyway, consider taking advantage.

2. Earth-friendly federal rebates for homeowners

As part of August 2022’s Inflation Reduction Act, people who make their homes more energy-efficient may qualify for rebates. Info about how to apply will become available in 2023.

And because they’re rebates, not tax credits, you won’t have to wait until tax season to get your money.

HOMES rebate program

If you upgrade your home to use at least 35% less energy, you may be eligible to receive up to $4,000 — or $8,000 if your total annual household income is less than 80% of the median income for your area.

Changes that reduce your energy use by as little as 15% may still get you some cash. To start, you could get an energy audit through your utilities provider or a third party to see which moves may cut your energy use the most, so you can plan work that could net you bigger rebates and lower utility bills.

High-efficiency electric home rebate program

Homeowners may be eligible for up to $14,000 total for installing energy-saving appliances or other home improvements. For instance, you could get up to $8,000 for heat pumps that can both heat and cool your home, up to $1,750 for heat pump water heaters, and up to $840 for a heat-pump clothes dryer or an electric stove or oven.

If you earn less than 80% of your state’s median income, you can get back 100% of the cost of your energy-saving appliances or home improvements. If you make 80% to 150% of your state’s median income, you can get back 50% of the cost. You can’t claim both the HOMES rebate and this one for the same upgrade.

3. Federal tax credits

These may not be new like the rebates above, but you don’t want to forget about them at tax time. They could potentially lower your tax bill — and some could add to your refund.

Child tax credit

Expect to claim $2,000 per qualifying dependent child who’s under 17 by the end of 2022 if your modified adjusted gross income (MAGI) is up to $400,000 for married couples filing jointly or up to $200,000 for other filers. This credit is also partially refundable — so if you don’t have a tax bill, you could get a refund up to $1,500.

Child and dependent care credit

This is intended to cover childcare expenses, or the care of a spouse or parent who isn’t mentally or physically able to care for themselves, while you work or look for work. The partially refundable credit — so if you don’t owe taxes, you could get some of this money as a refund — is up to $1,050 for one child or dependent, or up to $2,100 for 2 or more children or dependents.

Lifetime learning credit

You can claim up to $2,000 on qualified tuition and education-related expenses paid toward undergraduate, graduate, and professional degree courses, including skill development courses.

Individuals can’t make more than $90,000, and the cap is $180,000 for joint filers. This is a nonrefundable credit, which means that the money could lower your taxable income, but you won’t get money back as a refund if you don’t have a tax bill.

American opportunity tax credit

In one of your first 4 years of higher ed? Attending at least half-time and pursuing a degree or other qualified credential? You could get up to $2,500 off your tax bill — or a refund up to $1,000 — if your MAGI is $80,000 or less (or $160,000 or less if you’re married filing jointly).

You could qualify for a portion of the credit if you make over $80,000 but less than $90,000 (or over $160,000 but less than $180,000 if you’re married filing jointly).

Adoption credit

You can get up to $14,890 in adoption costs per child in 2022. This credit decreases at certain income levels, and people are not eligible if their MAGI is $263,410 or more. It’s a nonrefundable credit, so if you have no tax bill, you won’t get a refund.

Saver’s credit

Contribute to an IRA or retirement plan? You may be able to receive a credit worth up to 50% of your 2022 IRA contribution or retirement savings, up to a max of $2,000 if you’re married filing jointly or $1,000 for all others.

Other requirements: You must be over 18, you can’t have been a student in 2022, and no one can claim you as a dependent. Adjusted gross income limits to receive any portion of the credit: $68,000 or less, if you’re married filing jointly, $51,000 or less, if you’re filing as a head of household, or $34,000 or less for all other filers.

4. State stimulus payments

At least 20 states have instituted rebate programs to combat inflation or financial hardships brought on by the pandemic. While most states provided relief in 2022, these 7 states are still cutting checks and will be sending money to residents in 2023.


Californians have already started to receive inflation relief checks of up to $1,050 as part of the Middle Class Tax Refund. It’s based on 2020 filing status. If your California adjusted gross income is $500,000 or less if you filed jointly with your spouse, or $250,000 or less if you were a single filer, you should receive your payment by the end of January 2023.


State residents can get a tax rebate of $750 for individual filers and $1,500 for joint filers. While many of the checks have been sent out already, filers who received an extension and filed by the October 17 deadline will receive their refund by January 31, 2023.


A Special Session rebate is available for residents, who will get whichever is greater: $600 for married couples filing a joint return or $300 for all other filers, or 10% of the taxes owed before credits, payments, and donations on the 2020 Idaho return. Rebate payments will be processed into 2023.


The state is offering an income tax rebate based on 2021 tax returns. Single-filer residents get $50, while married couples filing jointly get $100. Those with dependents can get an additional $100 per dependent for up to 3 dependents.

Adjusted gross income limits are $200,000 for individuals and $400,000 for joint filers. There is also a property tax credit equal to the property tax credit you were entitled to claim on your 2021 Illinois tax return up to $300.

New Jersey

Some 2 million New Jersey residents are eligible to receive property tax rebates from the Affordable New Jersey Communities for Homeowners and Renters program. Homeowners making up to $150,000 may receive $1,500 rebates on their property taxes, while those earning between $150,000 and $250,000 may receive $1,000. Renters who earn up to $150,000 are entitled to $450. But you must apply by January 31, 2023. The rebates are scheduled to come by the end of May 2023.

South Carolina

Eligible residents who filed South Carolina individual income tax returns for 2021 by October 17 should receive rebates up to $800, based on tax liability minus credits, by the end of 2022. But if you haven’t yet filed your 2021 taxes, you have until February 15, 2023, to take care of it. Your rebate will then arrive in March 2023.


The 2022 one-time tax rebate required residents to file 2021 taxes by November 1, 2022. Individual filers with a tax liability may receive up to $250; joint filers with a tax liability may receive up to $500. Rebates should arrive within 4 months of your filing date.

5. Hero pay

States have been giving bonuses to first responders, medical professionals, law enforcement employees, educators, and childcare workers for their essential services during the pandemic. Here are the states paying out in 2023:

Essential workers in Connecticut

There were 2 programs initiated in 2022. The deadline has passed for the premium pay program, but the state is accepting applications until December 31, 2022, for the second: COVID-19 relief. That helps essential workers recover lost wages and out-of-pocket medical expenses if they contracted COVID-19 between March 10, 2020, and July 20, 2021.

Health care workers in New York

Frontline health care and mental hygiene workers who provide hands-on care to people in New York, regardless of where they live, could receive up to $3,000 through the Health Care Worker Bonus program. 

You may be eligible if you receive an annualized base salary (not counting bonuses or overtime pay) of $125,000 or less, regardless of whether you are full-time, part-time, temporary, or an independent contractor. Your employer must apply on your behalf, and payments will roll in throughout 2023 and 2024.

Childcare workers in Ohio

Workers in Ohio Department of Job and Family Services–licensed childcare centers and family childcares will receive either $3,000 or $1,500, depending on how many days they worked, under the Hero Pay initiative. This applies to various positions, including cooks, teachers, substitutes, and administrators. Payments will be sent in April 2023. No application is necessary, but to be eligible, you must create a profile in the Ohio Professional Registry.


About LRPC’s Monday Morning Minute

Lawton Retirement Plan Consultants, LLC (LRPC) Monday Morning Minute is crafted to provide decision-makers with important information about the economy, investments and corporate retirement plans in a format that allows a reader to consume the information in less than 60 seconds. As an independent, objective investment adviser, LRPC has access to many sources of research and shares the best and most relevant information with its readers each week.

About Lawton Retirement Plan Consultants, LLC

Lawton Retirement Plan Consultants, LLC (LRPC) is a Milwaukee, Wisconsin-based independent, objective Registered Investment Adviser (RIA) providing investment advisory, fiduciary compliance, employee education, provider management and plan design services to employer retirement plan sponsors. The firm specializes in sustainable investment strategies for retirement plans that incorporate Socially Responsible Investment (SRI) factors and Environmental, Social and Governance (ESG) elements. LRPC currently has contracts in place to provide consulting services on more than a half billion dollars in plan assets. For more information, please contact Robert C. Lawton at (414) 828-4015 or or visit the firm’s website at Lawton Retirement Plan Consultants, LLC is a Wisconsin Registered Investment Adviser.

Important Disclosures

This information was developed as a general guide to educate plan sponsors and is not intended as authoritative guidance, tax, legal or investment advice. Each plan has unique requirements and you should consult your attorney or tax adviser for guidance on your specific situation. In no way does Lawton Retirement Plan Consultants, LLC assure that, by using the information provided, a plan sponsor will be in compliance with ERISA regulations. Investors should carefully consider investment objectives, risks, charges, and expenses. The statements in this publication are the opinions and beliefs of the commentator expressed when the commentary was made and are not intended to represent that person’s opinions and beliefs at any other time. The commentary does not necessarily reflect the opinion of Lawton Retirement Plan Consultants, LLC and should not be construed as recommendations or investment advice. Lawton Retirement Plan Consultants, LLC offers no tax, legal or accounting advice and any advice contained herein is not specific to any individual, entity or retirement plan, but rather general in nature and, therefore, should not be relied upon for specific investment situations. Lawton Retirement Plan Consultants, LLC is a Wisconsin Registered Investment Adviser and accepts clients outside of Wisconsin based upon applicable state registration regulations and the “de minimus” exception.