At the moment, there are no doubt millions of taxpayers racing to get their 2020 federal tax returns finished up and either mailed off or electronically filed in advance of Monday’s imminent filing deadline.
The normal April deadline was pushed forward this year to May 17, as a result of the continued extraordinary circumstances surrounding the coronavirus pandemic. And no sooner will the IRS finish this year’s taxes than the agency will need to quickly shift to more COVID-related developments, such as the imminent monthly stimulus checks it will be sending out to families as part of the March stimulus law’s extension of the federal child tax credit. Beyond all this, meanwhile, there’s another important IRS update that you should be aware of, if you aren’t already: More than 1 million Americans have unclaimed tax refunds, some of which are set to expire soon.
The issue here is unclaimed tax refunds that are due to Americans who did not file a tax return (if you were supposed to have received a refund during a given tax year, generally there’s no punishment from the IRS if you didn’t file a tax return).
Per the IRS: Unclaimed income tax refunds for 2017 worth more than $1.3 billion are waiting to be claimed from an estimated 1.3 million taxpayers who did not file a 2017 Form 1040 federal income tax return. “The IRS wants to help taxpayers who are due refunds but haven’t filed their 2017 tax returns yet,” IRS Commissioner Chuck Rettig said in an announcement about these refunds. “Time is quickly running out for these taxpayers. There’s only a three-year window to claim these refunds, and the window closes on May 17. We want to help people get these refunds, but they will need to quickly file a 2017 tax return.”
Did you catch that, those of you who didn’t file a tax return for 2017? If you were supposed to have gotten a tax refund for tax year 2017, it’s about to disappear for good if you don’t claim that money — and the way you claim that money is by filing a tax return. In case you didn’t know, tax returns that aren’t claimed within three years become the property of the US Treasury.
Some additional fast facts about these unclaimed tax refunds:
- The IRS says that it estimates “the midpoint for the potential refunds for 2017 to be $865 — that is, half of the refunds are more than $865 and half are less.”
- It’s also important to note that the IRS says taxpayers seeking a 2017 tax refund may find that their checks are held back if they have not filed tax returns for 2018 and 2019, either.
- Also, the IRS says, “the refund will be applied to any amounts still owed to the IRS or a state tax agency and may be used to offset unpaid child support or past due federal debts, such as student loans.”