The IRS said it has nearly $ 1.5 billion in unclaimed tax refunds, and the tax agency is urging people to act before April 18 to claim the money owed to them.
Unclaimed returns come from about 1.5 million taxpayers who did not file a tax return in 2018, the agency said. Because there is a three-year period to claim refunds, the window to get the money will close for most taxpayers on April 18, which is this year’s tax deadline for federal taxes. People in Maine and Massachusetts have until April 19, 2022 to claim refunds, due to Patriots Day vacation in both states.
The average value of unclaimed tax returns is $ 813, which means that half of unclaimed refunds will be less than $ 813, and half will be higher, the IRS said.
While most Americans file annual tax returns, there are some people who are not required to do so. These are usually low-income households; for example, those earning less than the standard deduction generally do not have to file a return. For fiscal year 2021, the standard deduction is $ 12,550 for singles and $ 25,100 for married couples.
An estimated 12 million Americans do not file annual tax returns, according to an estimate by the Center for Budget and Policy Priorities. The IRS has been trying to get in touch with non-taxpayers for the past two years, as many of the federal government’s stimulus efforts, from stimulus checks to advanced child tax credit payments, are they were based on a taxpayer’s annual return.
If the money is not claimed before April 18, the refunds will become the property of the U.S. Treasury Department.
How to claim a refund
First, refunds are tied to people who did not file a return in 2018, which means that taxpayers who already filed the return for fiscal year 2018 are not eligible for unclaimed returns.
The first thing you need to know to claim a refund is that you will need to file a tax return for 2018.
“We want to help people get these refunds, but they have to file a 2018 tax return before this critical time,” IRS Commissioner Chuck Rettig said in a statement.
You must file a paper return with the IRS Center listed on the final page of the current Form 1040. This is organized by state, so taxpayers in Alabama, Georgia, and several other southern states, for example, should submit their returns. at an IRS office in Kansas City, Missouri.
Only tax forms for 2019 and later can be filed electronically, the IRS said in a statement.
This paper requirement could be a nuisance, as the IRS has warned that filing may result in processing delays. Because these returns must be opened by hand, the agency needs more time to send the paper returns. This year, the IRS is instant taxpayers submit your 2021 returns electronically to ensure prompt processing.
Refunds can be made
Finally, the IRS warns that people who have not claimed refunds after 2018 may have their checks withheld if they have not yet filed tax returns for 2019 and 2020.
In addition, the refund will apply to any amount that the taxpayer still owes to a state tax agency or the IRS, and could also be used to offset overdue child support payments or overdue federal debts, including student loans. .
Low- and moderate-income families may be eligible for higher repayments if they meet and qualify for the income tax credit, the IRS said. That loan in 2018 was worth up to $ 6,431, the agency noted. This tax credit, also known as the EITC, is based on the number of children a family has, as well as their marital status.
For example, a married couple who have three or more children together may apply to the EITC if they earn less than about $ 54,800. However, this income threshold drops to about $ 49,100 for single taxpayers with three or more children.
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