With the clock ticking on tax season, the IRS is reminding Americans that April 15 is also their last chance to file a past due return and receive a refund for tax year 2021.
Some 1.1 million Americans who didn’t file a federal income tax return for 2021 are collectively missing out on $1.025 billion in unclaimed refunds, according to the IRS. If you are one of them, you may be leaving money on the table and time is running out to claim it.
The IRS says there is no penalty for failing to file until now if a refund is due, but in order to receive one and claim any credits, a past due return must be filed within three years of the original due date. For those who didn’t file in 2022, that deadline is April 15, 2025.
Fail to file within the three-year window? Your refund becomes the property of the U.S. Treasury and you’re most likely not getting it back.
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How much does the IRS owe taxpayers?
The more than $1 billion estimate for unclaimed refunds is based on taxes that were withheld from paychecks or paid during 2021.
States with the highest median refund for 2021 include Massachusetts at $936; Rhode Island at $946; Pennsylvania at $993; and New York, where the IRS estimated the median unclaimed refund is $995.
The IRS estimates the midpoint for potential refunds nationwide for 2021 is $781, meaning half the refunds are more than $781 and half are less. Everyone’s circumstances are different. Actual refund amounts will vary based on a filer’s status, withholding amount, and other factors.
Why some refunds could be more or less
Tax year 2021 refunds may be held back if you haven’t filed returns for 2022 and 2023, so make sure you’ve filed for all three years. They may also be withheld and used to offset unpaid child support or past due federal debts, including student loans.
Taxpayers can potentially up their 2021 refund by thousands of dollars if they are eligible for and take advantage of credits, such as the recovery rebate credit and the earned income tax credit, when they file. But remember, that money goes to the U.S. Treasury unless you file by April 15.
Contributing: Susan Tompor
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