Internal Revenue Service (IRS)

Unclaimed income tax refunds total $1.3bn

The IRS estimates the midpoint for the potential refunds to be $865

Unclaimed income tax refunds worth more than $1.3bn await an estimated 1.3 million taxpayers who did not file their 2017 Form 1040 federal income tax return, according to the Internal Revenue Service (IRS). It estimates the midpoint for the potential refunds to be $865. 

In cases where a federal income tax return was not filed, the law provides most taxpayers with a three-year window of opportunity to claim a tax refund. 

If they do not file a tax return within three years, the money becomes the property of the U.S. Treasury. For 2017 tax returns, the window closes May 17, 2021, for most taxpayers. The law requires taxpayers to properly address, mail and ensure the tax return is postmarked by that date.

The IRS reminded those seeking a 2017 tax refund that their checks may be held if they have not filed tax returns for 2018 and 2019. In addition, the refund will be applied to any amounts still owed to the IRS or a state tax agency and may be used to offset unpaid child support or past due federal debts, such as student loans.

IRS commissioner Chuck Rettig said: “The IRS wants to help taxpayers who are due refunds but haven’t filed their 2017 tax returns yet. 

“Time is quickly running out for these taxpayers. There’s only a three-year window to claim these refunds, and the window closes on May 17. We want to help people get these refunds, but they will need to quickly file a 2017 tax return.”

The IRS added that by failing to file a tax return, people “stand to lose more than just their refund” of taxes withheld or paid during 2017. Many low- and moderate-income workers may be eligible for the Earned Income Tax Credit (EITC). 

For 2017, the credit was worth as much as $6,318. The EITC helps individuals and families whose incomes are below certain thresholds.

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