The IRS has announced that an estimated $1 billion in tax refunds from the 2021 tax year may become the property of the U.S. Treasury if over 1.1 million Americans do not take action soon. For those who have yet to file their 2021 tax return, this is the last chance to claim their tax refund before it is forfeited.
Deadline to Claim Your Tax Refund
Individuals who did not file their Form 1040 Federal Income Tax Return for the 2021 tax year (taxes typically filed in April 2022) are still eligible to claim their tax refund. However, the IRS reminds taxpayers that the deadline to claim these refunds is April 15, 2025. If unclaimed, these funds will be turned over to the U.S. Treasury.
Since taxpayers generally have three years to file and claim their refunds, those who missed filing in 2021 can still act before this critical deadline. The only way to ensure receipt of these refunds is by filing a 2021 tax return.
How Much Could You Receive?
According to the IRS, the median tax refund for 2021 is $781, not including applicable credits. However, potential refunds are even higher in some states. In Pennsylvania, Massachusetts, and Rhode Island, the median tax refund exceeds $900.
For many taxpayers, this could mean recovering a substantial amount that could be used to cover expenses, invest, or save. The IRS emphasizes that missing out on this opportunity would be equivalent to leaving free money unclaimed.
Don’t Miss Out on the Earned Income Tax Credit
Beyond just the tax refund, many taxpayers may also qualify for the Earned Income Tax Credit (EITC), a valuable benefit that helps low- and moderate-income workers. For the 2021 tax year, the EITC thresholds were:
- $51,464 ($57,414 if married filing jointly) for those with three or more qualifying children
- $47,915 ($53,865 if married filing jointly) for those with two qualifying children
- $42,158 ($48,108 if married filing jointly) for those with one qualifying child
- $21,430 ($27,380 if married filing jointly) for those without qualifying children
The maximum EITC for the 2021 tax year was $6,728, which could significantly increase an eligible taxpayer’s refund.
Potential Obstacles to Receiving Your Refund
Even if you file your 2021 tax refund claim before the April 15, 2025, deadline, the IRS warns that your refund may be withheld if you have not yet filed tax returns for 2022 and 2023. Additionally, the IRS may apply your refund to unpaid debts, including:
- Federal or state tax liabilities
- Unpaid child support
- Delinquent federal student loans or other government debts
Steps to File and Claim Your Tax Refund
To successfully file a 2021 tax return and claim your refund, the IRS recommends the following steps:
- Gather Your 2021 Tax Documents
- Locate W-2, 1099, and 5498 forms from 2021.
- If you don’t have your documents, check with your employer, bank, or financial institutions for copies.
- Use IRS Tools for Tax Records
- Access previous tax records via the IRS Individual Online Account.
- Request a tax return or account transcript via mail using the Get Transcript by Mail tool on the IRS website.
- File Your 2021 Tax Return
- If you are eligible for a refund, file your return as soon as possible before the deadline.
- Consider using IRS Free File or a professional tax preparer if you need assistance.
Don’t Miss This Opportunity
With an estimated $1 billion in unclaimed tax refunds, time is running out for taxpayers who did not file their 2021 returns. Whether you’re entitled to a refund or an additional credit like the Earned Income Tax Credit, taking action now can help secure the money that rightfully belongs to you.
Additionally, the deadline to file your 2024 taxes is April 15, 2024, so ensure you remain up to date on your filings to avoid any future refund delays. For more details, visit the IRS website or contact a tax professional for guidance.
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