IRS says $1.025 billion in tax refunds remain unclaimed for 2021 taxes

What invoice would you pay with an additional $750 or $850?

Certain, we’re not speaking about cashing a billion-dollar profitable lottery ticket. However the IRS says greater than 1.1 million individuals nationwide are owed some first rate dough.

In case you’re a type of individuals, all it’s important to do is file a 2021 federal revenue tax return by April 15.

Taxpayers have roughly one month left now to assert that 2021 refund.

The Inside Income Service stated Tuesday that $1.025 billion in federal revenue tax refunds stay unclaimed by taxpayers who haven’t filed their Type 1040 for the 2021 tax 12 months.

The estimate for unclaimed refunds owed relies on taxes that had been withheld from paychecks or paid throughout 2021.

Katelyn Hill-Fuqua, 64, of Romulus, left, speaks to Carla Hart, 33, of Dearborn Heights, a tax preparer and Wayne Metropolitan Community Action Agency site coordinator in Detroit on Wednesday, Jan. 29, 2025. — Katelyn Hill-Fuqua, 64, of Romulus, left, speaks to Carla Hart, 33, of Dearborn Heights, a tax preparer and Wayne Metropolitan Neighborhood Motion Company website coordinator in Detroit on Wednesday, Jan. 29, 2025.

States with a excessive unclaimed median refund for 2021 embrace Massachusetts, $936; Rhode Island, $946; Pennsylvania, $993; and New York, with a median unclaimed refund of $995 for the 2021 tax 12 months.

The IRS estimates the midpoint for the potential refunds nationwide for 2021 to be $781 — that’s, half of the refunds are greater than $781 and half are much less. The median is identical in Colorado and North Dakota.

The precise refund quantity, the IRS notes, will differ primarily based on a family’s tax state of affairs.

Watch out for tax scams: IRS unveils 2025 ‘Dirty Dozen’ list to watch for

Many individuals could possibly be owed more cash as a result of this estimate doesn’t embrace any cash from the restoration rebate credit score that may apply to some tax filers on a 2021 return or cowl different potential tax credit, such because the earned revenue tax credit score, for many who qualify.

Submitting a 2021 federal revenue tax refund could possibly be key for many individuals, particularly in the event that they already did not gather a stimulus fee.

The restoration rebate credit score amounted to as much as $1,400 per individual when claimed on 2021 federal revenue tax returns. Or it was as much as $2,800 for a married couple submitting collectively. The credit score additionally would apply to all qualifying dependents claimed on a tax return.

A single individual with no dependents may have obtained a most credit score of $1,400.

Married taxpayers who filed a joint return that claimed two qualifying dependents on the 2021 return may have certified for as much as $5,600.

To make sure, many individuals may need already obtained the stimulus cash that they had been owed, because the IRS issued a lot of that money robotically.

Again within the spring of 2021, the IRS started sending these stimulus funds upfront primarily based on info out of your 2020 or 2019 tax return. Many individuals obtained 1000’s of {dollars} in stimulus cash roughly 4 years in the past primarily based on info the IRS had at the moment.

However some who did not file a 2021 return could possibly be owed cash for quite a lot of causes. Perhaps, your revenue fell considerably in 2021 from earlier years, sufficient in order that your revenue was inside the required revenue limits for the stimulus fee.

You can’t double-dip. The IRS will subtracted no matter cash you already obtained immediately upfront in 2021 from any credit score claimed whenever you filed a 2021 tax return.

Earlier this 12 months, the IRS despatched some 1 million taxpayers who already had filed 2021 federal revenue tax returns further money out of the blue as a result of they one way or the other missed out on claiming the stimulus or restoration rebate credit score once they certified to take action.

The IRS estimated that about $2.4 billion was robotically distributed as a part of this particular fee program involving restoration rebate credit score. That is a mean of $2,400 primarily based on a gaggle of 1 million taxpayers.

In case you did not file a 2021 tax return but, you continue to have till April 15 to file a 2021 return to assert the credit score and another refund you is perhaps owed. You can’t file the 2021 return after that April 15 deadline.

The IRS notes that eligible taxpayers who didn’t file a 2021 return should file a tax return to assert a restoration rebate credit score, and that is true even when their revenue from a job, enterprise or different supply was minimal or nonexistent.

Below the regulation, taxpayers often have three years to file a federal return to assert their tax refunds. Do not file inside three years? Effectively, you are saying goodbye to that cash, which is able to turn out to be the property of the U.S. Treasury.

Granted, submitting a 2021 federal revenue tax return now does not assure that you will notice the money. These refund checks could also be held again if taxpayers haven’t filed tax returns for 2022 and 2023.

Plus, any refund quantity for 2021 robotically shall be utilized to quantities nonetheless owed to the IRS or a state tax company and that cash could also be used to offset unpaid baby assist or different overdue federal money owed, equivalent to scholar loans.

Contact private finance columnist Susan Tompor: stompor@freepress.com. Observe her on X @tompor.

This text initially appeared on Detroit Free Press: More than $1B in unclaimed 2021 federal tax returns, IRS says

Advertise here

Source link