The IRS informed the public that a great majority of citizens need to claim their tax cash. As reported, the IRS is still in the process of dealing out information about the tax situation of the country, this time being the fact that around 1.1 million citizens are yet to claim their federal tax refunds from the 2021 tax year.
The loss of the money may be indefinite if the IRS does not have any response from the taxpayers by the 15th of April 2025.
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Why April 15 Matters
According to the present law, U.S. citizens are allowed three years from the date they submitted their tax documents to receive the refund. If they don´t, the money will be collected by the U.S. Treasury. And so, people who have not filed their 2021 tax return yet need to file it until April 15 in order to obtain their money, which is totally legal.
From a federal perspective, the citizens can assert their rights to the money and thus, for the estimated mid-spot amount of $946, they can get it back. For instance, Rhode Island, California, and Michigan are some of the states with forthcoming unclaimed money.
Who’s Owed and How Much?
Mentions are made about 1.025 billion U.S. dollars that have not been collected as tax refunds from 2021. Rhode Island counts around 3,600 eligible people, 1,800 of whom got more than $946.
Similarly, larger states are also in trouble:
- California–$92 million
- Michigan–$37 million
The research of the IRS on the topic shows that most of the taxpayers didn’t go through the paperwork of completing form 1040 or didn’t have the slightest idea that they could also be part of a large group of people that have a legal right to the refund.
Other Money at Risk
In addition to that, if the taxpayers hadn’t claimed certain tax credits, they might have left even more money on the table. The Recovery Rebate Credit, like one example, could have been availed to the people who weren’t paid the checks for months during the COVID-19 crisis.
Another of those important refund boosters was the Earned Income Tax Credit (EITC). In 2021, the credit was up to $6,728 for married couples and for individuals with qualifying children.
IRS informed about the income limits of EITC for 2021 that were:
- $51,464 for three or more children
- $47,915 for two children
- $42,158 for one child
- $21,430 for no children
These thresholds are for the tax filers who are not married; married couples have slightly higher numbers.
Are There Any Changes If You Haven’t Filed?
So, if filing your 2021 tax return is something that you haven’t got round to yet said with only a slight degree of panic, it is not late for filing, well almost. You have to send your Form 1040 by the deadline – April 15. However, if you also have not filled out 2022 or 2023 tax returns, the IRS could decide to keep your 2021 refund until you have completed all filings.
Refund? There you go, people will get excited to find out that money is coming back to them, but not if not just yet. The IRS may offset your refund and apply it to any debts you have from unpaid federal taxes, state taxes, student loans or child support.
Will the Tax Time Be Extended?
Yes, the Internal Revenue Service has provided a way out if you need some extra time to prepare your return. You can have more time to file by requesting an automatic extension through Form 4868. This extends your filing time to October 15 while the deadline for claiming your 2021 refund is still April 15.
How Does the Refund Process Work?
Taxpayers should be prepared to wait approximately 21 days for their refund from the IRS if they filed electronically. Those who select the direct deposit option can get their refunds even faster. Data up to the end of January shows that the average refund paid this year amounted to $1,928, which is higher than the $1,395 issued in early 2024.
If you want to know if you are entitled to a refund, you can use the Where’s My Refund? tool. After you e-file, it takes 24 hours to become active and if you mail a paper return, it will become active in 4 weeks only.
The time is going fast, and it’s the last warning we are giving. Should you suspect that you are still owed money from the 2021 tax year, come forward now. Submit your return earlier than the 15th of April to avoid losing your refund forever.
Make sure not to leave your money for the authorities to keep – get it back while you still have the chance.
