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To graciously decline a holiday party invitation, express your desire to attend while stating that you cannot this year. You might say, "I would love to see you all and would love to come, but I just don’t feel that I can do that this year." If you have a specific reason, such as a medical issue, you can mention it, but it’s not necessary to provide a long explanation. Politely thank them for the invitation and express your hope to connect under better circumstances next year. Remember, a simple "no" is a valid response.