Unclaimed tax refunds totaling about $1 billion remain unclaimed at the IRS because millions of taxpayers haven’t filed their tax returns for the 2021 tax year. (In other words, you might have money waiting for you and not even know it).
As former IRS Commissioner Danny Werfel has said, “Many people may have overlooked or forgotten about these refunds.” As a result, the IRS recommends taxpayers start soon to ensure they don’t miss out.
$1 billion unclaimed tax refunds: Are you due one?
Normally, taxpayers have three years to file their federal tax return and to claim tax refunds due, if any. After the three years pass, the unclaimed refund money becomes U.S. Treasury Department property. While that is the normal rule, you may have seen that the three years for filing returns and claiming refunds was extended for some federal tax returns because of the pandemic.
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Basically, if you haven’t filed your 2021 return, you have until Tax Day 2025 to do so before they lose tax refunds associated with that tax return.
Average Refund Amount of $781
How much money are we talking about? The IRS says that the average median unclaimed refund amount for 2021 is $781. (About half of the refunds are more than that amount and about half are less.)
In terms of who is probably due a refund, the IRS has mentioned students, part-time workers, and others with little income who may overlook filing a tax return and never realize that they may be owed a refund.
Even though the agency has estimated the average refund, the actual amount that you may receive (if you’re due a refund and file your 2021 tax return before the April deadline) will depend on your specific tax situation.
However, the IRS has created state-by-state estimates of how many people might be due refunds. That information also shows the median potential refund and the total potential refunds for each state.
- For example, in California, 1116,300 people have unclaimed IRS refunds at an estimated potential median amount of $600 each. That’s potentially more than $92 million in unclaimed money.
- Some states with relatively high estimated potential median refund amounts are Massachusetts at $936, New York at $995, and Rhode Island at $946.
- In West Virginia, as another example, the IRS estimates that about 4,800 people are due refunds with the total potential refunds for the state being about $4.4 million.
For more information about the number of people who may be due 2021 IRS refunds and the estimated amounts of money involved, visit the IRS website.
Unclaimed IRS Refunds: What Should You Do?
If you think you may have an unclaimed IRS refund, you should review and gather the records needed to file your 2021 federal income tax return by April 15, 2025. That may seem daunting because several years have passed, but the IRS has ways to request key documents and transcripts you may need to file.
For example, if you don’t have a W-2, or other important tax forms from 2021, like a 1099 form, you can request copies from your former employer. Banks, or other payors, for certain tax forms, may be able to help as well.
If your former employers or payors can’t help you, the IRS has a Get Transcript Online tool. The agency also has a way to request a transcript of your wage and income. While, according to the IRS, their online transcript tool is a fast and relatively easy approach, the agency warns that ordering a transcript using a written request can take several weeks.
Note: Keep in mind that even if you are due a refund from 2021, the IRS might hold on to your check if you haven’t filed tax returns for 2022 and 2023. Also, if you owed the IRS or a state tax agency or have unpaid child support or other federal debts, you might not receive your refund money.
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