Last week, the Internal Revenue Service ("IRS") announced that more than 1.1 million individual taxpayers have unclaimed refunds related to the 2021 tax year. By the IRS's estimates, these unclaimed refunds may equate to more than $1 billion.
The estimated median refund amount is $781. However, many people could be owed more as this estimate does not include the Recovery Rebate Credit or any other applicable credits that may apply. A state-by-state estimate of potential refunds can be found here: Taxpayers should act now to claim more than $1 billion in refunds for tax year 2021 with the April 15 deadline fast approaching | Internal Revenue Service
Generally, the latest date that you can claim a refund for a specific tax year is the later of the following:
- 3 years from the date you filed your federal income tax return, or
- 2 years from the date you paid the tax.
If a taxpayer files a return before its due date, the IRS considers it filed on the due date. If tax is withheld or estimated taxes are paid, the IRS considers those payments to have been made on the return due date. For taxpayers with unclaimed refunds for the 2021 or 2022 tax years, depending on whether and when payments were made and returns were filed, there is only one month remaining, until April 15, 2025, on those statutes of limitations.
As an additional reminder, the IRS may hold a taxpayer's refund if they have not filed tax returns for subsequent years. Further, any refund amount may be applied to amounts owed to the IRS for other tax years or may be paid to a state tax agency, be used to offset unpaid child support, or applied to other past due federal debts such as student loans.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
