$760 Million In Tax Refunds Will Soon Expire: IRS

$760 Million In Tax Refunds Will Soon Expire: IRS
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While most people are gearing up for tax season (or procrastinating until the week before as the case may be), the Federal government is still waiting to hear from nearly a million people who haven’t filed since 2010 and have a combined $760 million in tax refunds waiting around unclaimed.

“The window is quickly closing,” said IRS commissioner John Koskinen. “We encourage students, part-time workers and others who haven’t filed for 2010 to look into this before time runs out on April 15.”

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Unclaimed tax refunds miss out on earned income tax credit

Ironically, though maybe not surprisingly, the people who are missing out on tax refunds are usually those who could most use the money. The IRS says that many of the people leaving their refunds on the table aren’t required to file because their income is too low, but they have still had some taxes withheld from their paychecks or paid quarterly estimates that turned out to be too high. Some low income workers may have also not accounted for the effect of the earned income tax credit, which was as high as $5,666 in 2010 for qualified filers.

There’s no penalty for failing to collect a refund, but taxpayers will need to completely catch up on their taxes. The IRS warns that refund checks will be held for anyone who claims a 2010 refund but still hasn’t filed for 2011 and 2012.

The median unclaimed tax refund in 2010 was $571, which doesn’t seem insignificant for a person who makes so little that filing taxes is optional. California has the most unclaimed refunds, 86,000 out of the 918,600 total, and Vermont has the fewest with just 1,600. Anyone who wants to get their refund before it’s too late will need to have their 2010 taxes filled out and stamped by April 15.

Electronic filing up this year

Looking at a fairly different demographic, the number of 2013 refunds already issued this year is 5.6% higher than it was at the same point last year, and the average refund is up 3% this year to $3,034. Nearly 88% of refunds have been directly deposited into filers’ bank accounts this year, which the IRS has been pushing because it saves everyone time and reduces processing costs. The number of tax returns filed electronically from a home computer is up 7.5% so far this year, and the IRS says that it has already gotten 40% of returns that it expects this year.

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