The Irs Has Unclaimed Refunds Totaling $1.5 Billion. However, the Deadline for Claiming the Money Is April 18.

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The IRS reported that it had about $1.5 billion in unclaimed tax refunds — and the tax agency is pushing taxpayers to act before April 18 to claim any money owed to them.

The government said the unclaimed refunds are the result of around 1.5 million taxpayers who did not file a tax return in 2018. Due to the three-year window for claiming refunds, the window for the majority of taxpayers will end on April 18, which is this year’s federal tax deadline. Due to the two states’ Patriots’ Day holidays, residents of Maine and Massachusetts have until April 19, 2022, to receive their refunds.

 

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The IRS stated that the median value of unclaimed tax refunds is $813 — which means that half of all unclaimed refunds will be less than $813 and half would be more than that.

While the majority of Americans are obligated to file annual tax returns, others are not. These are often low-income households – those earning less than the standard deduction, for example, are normally not required to submit a return. The standard deduction is $12,550 for single taxpayers and $25,100 for married couples for the 2021 tax year.

According to the Center on Budget and Policy Priorities, around 12 million Americans do not file annual tax returns. Since many of the federal government’s stimulus programmes — from stimulus checks to advanced Child Tax Credit payments — were predicated on a taxpayer’s annual return during the last two years, the IRS has attempted to reach out to those non-filers.

If the funds are not claimed by April 18, they will revert to the US Treasury Department.

 

How to request a refund

To begin, the refunds are only available to individuals who did not file a return in 2018 – taxpayers who have already filed for the 2018 tax year are ineligible for the unclaimed refunds.

The first thing to understand about requesting a refund is that you must file a 2018 tax return.

“We want to assist individuals in obtaining these refunds, but they must complete a 2018 tax return by this key deadline,” IRS commissioner Chuck Rettig said in a statement.

You must file your return on paper through the IRS centre mentioned on the final page of the current Form 1040. This is structured by state, so taxpayers in Alabama, Georgia, and numerous other Southern states should send their returns to a Kansas City, Missouri, IRS office.

The IRS stated in its announcement that electronic filing is available for tax forms filed in 2019 and thereafter.

That paper requirement may have a disadvantage, as the IRS has cautioned that submitting on paper may result in processing delays. Because these returns must be opened manually, it takes the agency longer to dispatch paper returns. This year, the IRS is asking taxpayers to electronically file their 2021 forms to ensure expedited processing.

Refunds may be withheld in certain circumstances.
Finally, the IRS is warning that taxpayers who have not received their 2018 refunds may have their checks held if they have not yet submitted their 2019 and 2020 tax forms.

Additionally, the refund will be applied to any balance owed to a state tax agency or the IRS by the taxpayer — and it may also be used to offset past-due child support payments or past-due federal debts, such as student loans.

 

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The IRS noted that low- and moderate-income families may qualify for larger refunds if they submit and qualify for the Earned Income Tax Credit. According to the agency, this credit was valued up to $6,431 in 2018. This tax credit, also known as the Earned Income Tax Credit, is calculated depending on a family’s number of children and filing status.

For example, a married couple filing jointly with three or more children who earn less than approximately $54,800 per year may qualify for the EITC. However, for single taxpayers with three or more children, this income level reduces to around $49,100.

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