It is permissible for a Muslim to accept gifts from the kuffaar or to give them gifts, especially if they are relatives. The evidence for that is as follows:
It was narrated that Abu Humayd al-Saa’idi said: We went on campaign with the Prophet (peace and blessings of Allaah be upon him) to Tabook, and the king of Aelia gave the Prophet (peace and blessings of Allaah be upon him) a white mule and a cloak, and he (the Prophet (peace and blessings of Allaah be upon him)) approved of him as the ruler of his land. Narrated by al-Bukhaari (2990).
(b) It was narrated that Katheer ibn ‘Abbaas ibn ‘Abd al-Muttalib said: ‘Abbaas said: I was present with the Messenger of Allaah (peace and blessings of Allaah be upon him) on the day of Hunayn. Abu Sufyaan ibn al-Haarith ibn ‘Abd al-Muttalib and I stayed close to the Messenger of Allaah (peace and blessings of Allaah be upon him) and did not leave him. The Messenger of Allaah (peace and blessings of Allaah be upon him) was riding a white mule of his, that had been given to him by Farwah ibn Nufaathah al-Judhaami. Narrated by Muslim (1775).
It was proven that the Sahaabah also (accepted gifts from the kuffaar) with the permission of the Prophet (peace and blessings of Allaah be upon him) during his lifetime. The mother of Asma’ bint Abi Bakr – who was a mushrikah – visited her daughter and the Prophet (peace and blessings of Allaah be upon him) gave permission to Asma’ (may Allaah be pleased with her) to uphold ties of kinship with her. And it is proven that ‘Umar ibn al-Khattaab gave a suit to his brother who was a mushrik. Both hadeeth are narrated in al-Saheehayn.
To sum up: it is permissible for a Muslim to give gifts to a kaafir and to accept gifts from him.
With regard to gifts given on their festivals, it is not permissible to give or accept them, because that is venerating their festivals and expressing approval of them and helping them in their kufr.
Shaykh al-Islam Ibn Taymiyah (may Allaah have mercy on him) said:
If someone gives a gift to the Muslims on these festivals and that is contrary to his habit at all other times apart from this festival, then his gift is not to be accepted, especially if the gift is something that is used to imitate them, such as giving candles and the like at Christmas, or giving eggs, milk and lambs on Maundy Thursday, which comes at the end of their fast (Lent).
Similarly, no gift should be given to any of the Muslims on these festivals because of the festival, especially if it is something that is used to imitate them, as we have stated above.
The Muslim should not sell the things that Muslims could use to imitate them on that festival, such as food, clothing and the like, because that is helping them in doing evil.
Iqtida’ Siraat al-Mustaqeem, p. 227.
And he (may Allaah have mercy on him) also said:
As for the Muslim selling them things that they use for their festivals, such as food, clothing, herbs and the like, or giving those things to them, that is a kind of helping them to celebrate their haraam festival. This is based on the principle that it is not permissible to sell to the kaafirs grapes or juice that they can use for wine, and it is not permissible to sell them weapons with which they can fight the Muslims.
Iqtida’ al-Siraat al-Mustaqeem, p. 229
Ibn al-Qayyim (may Allaah have mercy on him) said concerning the festivals of the People of the Book:
Just as it is not permissible for them to celebrate them openly, it is not permissible for the Muslims to help them in that or attend with them, according to the consensus of the scholars. This was stated clearly by the fuqaha’ who follow the four imams, in their books.
Then he (may Allaah have mercy on him) quoted the words of the imams of the madhhabs and the prominent scholars.
Ahkaam Ahl al-Dhimmah (3/1245-1250).
See also the answer to question no. 12666.
It is not permissible for the Muslim to take religious matters lightly. He must practise his religion openly. They practise their religion openly and display its symbols during these festivals; we should also openly reject their gifts and refuse to join them and help them in that. This is one of the teachings of our religion.
We ask Allaah to help us to understand the rulings of our religion and to help us to act upon it and adhere to it.
And Allaah knows best.