The IRS said Tuesday that more than $1 billion in tax refunds remain unclaimed by approximately 1.1 million people who have not filed a 1040 form for the 2021 tax year, and if they don't claim the refunds by April 15, the money becomes property of the U.S. Treasury.
The agency said in a news release that it estimated the median unclaimed refund amount is $781 for 2021, and that the estimate does not include the Recovery Rebate Credit or other credits that might be applicable.
"By missing out on filing a tax return, people stand to lose more than just their refund of taxes withheld or paid during 2021," the IRS said. "Many low- and moderate-income workers may be eligible for the Earned Income Tax Credit. For 2021, the EITC was worth as much as $6,728 for taxpayers with qualifying children. The EITC helps individuals and families whose incomes are below certain thresholds.
"The thresholds for 2021 were: $51,464 ($57,414 if married filing jointly) for those with three or more qualifying children; $47,915 ($53,865 if married filing jointly) for those with two qualifying children; $42,158 ($48,108 if married filing jointly) for those with one qualifying child; and $21,430 ($27,380 if married filing jointly) for those without qualifying children."
The IRS estimated that California has the most individuals (116,300) with a total of $92,299,600 in unclaimed refunds. Texas was next on the list with 102,200 individuals but with a higher total of unclaimed refunds ($94,792,200). New York (73,000 and $72,477,100) was third, and Florida (69,800 and $61,087,200) was fourth.
The IRS estimated that in four states, the median potential refund exceeded $900: Massachusetts ($936), New York ($995), Pennsylvania ($993), and Rhode Island ($946).
The IRS said refunds for taxpayers could be held if they did not file tax returns for 2022 and 2023. Plus, any refund amount for 2021 will be applied to amounts still owed to the IRS or a state tax agency and could be used to offset unpaid child support or other past-due federal debts such as student loans.