Photo courtesy of Josh Felise via Unsplash.com.
Oftentimes folks with low incomes don’t see the need to file a tax return. Much of the time this is the correct way to go – after all, why go through the hassle and expense of filing a tax return for no purpose?
Unfortunately, many of these folks who didn’t file a tax return are actually due a refund of withheld tax, and possibly even tax credits that they weren’t aware of. The IRS has compiled a list of approximately 1 million taxpayers who didn’t file a tax return in 2011, and this group is due a total of approximately $1 billion in refunds.
The problem is that in order to claim these refunds, the tax return for 2011 has to be filed by April 15, 2015 – 3 years after the original filing date. If you don’t file by then, the refund is lost to you forever.
Recently the IRS produced a Newswire IR-2015-44 which details the information about these unclaimed tax refunds. Below is the text of the Newswire:
IRS Has Refunds Totaling $1 Billion for People Who Have Not Filed a 2011 Federal Income Tax Return
WASHINGTON — Federal income tax refunds totaling $1 billion may be waiting for an estimated one million taxpayers who did not file a federal income tax return for 2011, the Internal Revenue Service announced today. To collect the money, these taxpayers must file a 2011 tax return with the IRS no later than Wednesday, April 15, 2015.
“Time is running out for people who didn’t file a 2011 federal income tax return to claim their refund,” said IRS Commissioner John Koskinen. “People could be missing out on a substantial refund, especially students or part-time workers. Some people may not have filed because they didn’t make much money, but they may still be entitled to a refund.”
The IRS estimates half of the potential refunds for 2011 are more than $698.
In cases where a tax return was not filed, the law provides most taxpayers with a three-year window of opportunity for claiming a refund. For 2011 tax returns, the window closes on April 15, 2015. If no return is filed to claim a refund within three years, the money becomes property of the U.S. Treasury.
The law requires the tax return be properly addressed, mailed and postmarked by that date. There is no penalty for filing a late return that qualifies for a refund.
The IRS reminds taxpayers seeking a 2011 refund that their checks may be held if they have not filed tax returns for 2012 and 2013. In addition, the refund will be applied to any amounts still owed to the IRS, or their state tax agency, and may be used to offset unpaid child support or past due federal debts, such as student loans.
By failing to file a tax return, people stand to lose more than just their refund of taxes withheld or paid during 2011. Many low-and-moderate income workers may not have claimed the Earned Income Tax Credit (EITC). For 2011, the credit is worth as much as $5,751. The EITC helps individuals and families whose incomes are below certain thresholds. The thresholds for 2011 were:
- $43,998 ($49,078 if married filing jointly) for those with three or more qualifying children,
- $40,964 ($46,044 if married filing jointly) for people with two qualifying children,
- $36,052 ($41,132 if married filing jointly) for those with one qualifying child, and
- $13,660 ($18,740 if married filing jointly) for people without qualifying children.
Current and prior year tax forms and instructions are available on the IRS.gov Forms and Publications page, or by calling toll-free: 800-TAX-FORM (800-829-3676). Taxpayers who are missing Forms W-2, 1098, 1099 or 5498 for the years: 2011, 2012 or 2013 should request copies from their employer, bank or other payer.
If these efforts are unsuccessful, taxpayers can get a free transcript showing information from these year-end documents by going to IRS.gov. Taxpayers can also file Form 4506-T to request a transcript of their tax return.
Individuals who did not file a 2011 return with a potential refund:
| State or District | Estimated Number of Individuals | Median Potential Refund | Total Potential Refunds* |
| Alabama | 19,900 | $693 | $17,794,000 |
| Alaska | 5,300 | $795 | $5,703,000 |
| Arizona | 27,700 | $618 | $23,649,000 |
| Arkansas | 10,600 | $678 | $9,371,000 |
| California | 103,700 | $627 | $92,209,000 |
| Colorado | 21,100 | $668 | $19,258,000 |
| Connecticut | 13,400 | $777 | $13,415,000 |
| Delaware | 4,800 | $726 | $4,579,000 |
| District of Columbia | 3,900 | $736 | $3,812,000 |
| Florida | 67,500 | $720 | $64,106,000 |
| Georgia | 36,200 | $628 | $31,250,000 |
| Hawaii | 7,100 | $742 | $6,842,000 |
| Idaho | 4,700 | $595 | $3,838,000 |
| Illinois | 44,000 | $763 | $43,177,000 |
| Indiana | 23,900 | $732 | $22,135,000 |
| Iowa | 11,100 | $719 | $10,128,000 |
| Kansas | 11,600 | $667 | $10,421,000 |
| Kentucky | 14,300 | $736 | $12,935,000 |
| Louisiana | 22,000 | $693 | $21,432,000 |
| Maine | 4,500 | $645 | $3,748,000 |
| Maryland | 25,000 | $694 | $23,628,000 |
| Massachusetts | 25,800 | $736 | $25,005,000 |
| Michigan | 36,200 | $721 | $34,254,000 |
| Minnesota | 16,500 | $632 | $14,148,000 |
| Mississippi | 11,100 | $629 | $9,625,000 |
| Missouri | 23,600 | $655 | $20,378,000 |
| Montana | 3,700 | $676 | $3,381,000 |
| Nebraska | 5,700 | $683 | $5,108,000 |
| Nevada | 13,300 | $702 | $12,185,000 |
| New Hampshire | 4,600 | $775 | $4,518,000 |
| New Jersey | 34,200 | $780 | $34,520,000 |
| New Mexico | 8,500 | $688 | $7,799,000 |
| New York | 63,400 | $765 | $62,809,000 |
| North Carolina | 31,700 | $595 | $26,248,000 |
| North Dakota | 2,600 | $761 | $2,591,000 |
| Ohio | 39,600 | $699 | $35,218,000 |
| Oklahoma | 19,300 | $707 | $17,988,000 |
| Oregon | 17,500 | $598 | $14,262,000 |
| Pennsylvania | 44,000 | $770 | $42,228,000 |
| Rhode Island | 3,400 | $748 | $3,270,000 |
| South Carolina | 13,200 | $609 | $11,160,000 |
| South Dakota | 2,600 | $732 | $2,480,000 |
| Tennessee | 20,700 | $690 | $18,630,000 |
| Texas | 101,800 | $743 | $103,164,000 |
| Utah | 8,000 | $610 | $6,944,000 |
| Vermont | 2,100 | $707 | $1,921,000 |
| Virginia | 32,100 | $685 | $29,647,000 |
| Washington | 28,400 | $750 | $28,705,000 |
| West Virginia | 5,100 | $784 | $5,023,000 |
| Wisconsin | 14,100 | $621 | $11,953,000 |
| Wyoming | 2,800 | $835 | $2,984,000 |
| Totals | 1,117,900 | $698 | $1,041,576,000 |
* Excluding the Earned Income Tax Credit and other credits.