$1 Billion in Tax Refund Money Will Disappear in 1 Day if You Don’t Do This

Millions of dollars in potential tax refunds for the 2021 tax year remain unclaimed, and the IRS deadline to retrieve this money is fast approaching. Taxpayers who did not file a return for 2021 may be entitled to these funds, but time is running out to claim them.

Urgent Deadline for 2021 Tax Refunds Approaching

Time is of the essence for taxpayers who have yet to claim their 2021 tax refund. According to the Internal Revenue Service, over a million individuals nationwide have unclaimed refunds from 2021. These individuals have a final opportunity to file and secure their money before it is forfeited to the U.S. Treasury.

Unclaimed refunds are held by the IRS for a three-year period. After this grace period, specifically after April 15th, these funds become the property of the U.S. Treasury, making it impossible for taxpayers to recover them.

Taxpayers seeking to recover a 2021 tax refund should be aware that any refunds may be held if returns for 2022 and 2023 are outstanding. The following sections detail the steps to claim your 2021 tax refund and provide guidance for those missing necessary tax documents.

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IRS Deadline to Claim 2021 Tax Refunds

Federal law mandates that the IRS retain unclaimed income tax refunds for a period of three years. Taxpayers have a three-year window from the original tax return due date to claim their funds. Failure to file within this timeframe results in the forfeiture of the refund to the U.S. Treasury.

To ensure you receive your unclaimed funds, it is imperative to file your 2021 tax return by April 15, 2025.

Understanding the Earned Income Tax Credit (EITC)

Missing the filing deadline not only means losing your tax refund on withheld or paid taxes in 2021, but it could also mean missing out on the Earned Income Tax Credit. Many individuals and families with low to moderate incomes may qualify for this significant tax benefit.

For the 2021 tax year, the EITC could have been worth as much as $6,728 for eligible taxpayers with children. This credit is specifically designed to support households with incomes below specific thresholds. The 2021 income limits for the Earned Income Tax Credit were as follows:

• $51,464 (or $57,414 if married filing jointly) for taxpayers with three or more qualifying children.
• $47,915 (or $53,865 if married filing jointly) for taxpayers with two qualifying children.
• $42,158 (or $48,108 if married filing jointly) for taxpayers with one qualifying child.
• $21,430 (or $27,380 if married filing jointly) for taxpayers without qualifying children.

Determining if You Have Unclaimed IRS Tax Refunds

Currently, there is no straightforward method for taxpayers to check for missing tax refund money from 2021. The only definitive way to ascertain if the IRS is holding a refund for you is to file a tax return for that specific year.

The IRS “Where’s My Refund?” online tool is not applicable in this situation, as it only provides status updates for refunds from returns that have already been processed.

Steps to Claim Your 2021 Tax Refund

To claim your 2021 tax refund, you must submit your tax return for that year via mail. Most tax software providers typically maintain older versions of their software for up to three years, which can assist in completing IRS Form 1040 and associated schedules. However, electronic filing (e-filing) is not an option for prior-year returns. You will need to print, sign, and mail your return to the appropriate IRS processing center. The return must be postmarked by April 15, 2025, for most filers.

The specific mailing address for your 2021 tax return depends on your state of residence or U.S. territory and can be found in the IRS Form 1040 instructions.

Required Documents for Filing a Prior Year Tax Return

Tax forms for the 2021 tax year are readily available on the official IRS forms page.

Alternatively, you can request a free wage and income transcript from the IRS. This transcript provides the necessary information to accurately complete your tax return. To obtain an instant transcript, you will need to create an online IRS account if you do not already have one.

Potential Tax Refund Offsets for Outstanding Debts

Even if you anticipate a refund, it is possible that you may not receive the full amount, or any refund at all. The IRS may offset, or reduce, your tax refund to cover outstanding federal tax liabilities, state income tax debts, state unemployment compensation debts, child support obligations, spousal support payments, or other federal debts, such as student loans.

If a tax refund offset is applied to cover past-due federal taxes, the IRS manages this process and will send you an official notice detailing the offset. Offsets for other types of debts are managed through the Bureau of Fiscal Services’ Treasury Offset Program. This program will also issue a notification if your tax refund was used to satisfy outstanding debts.

If you believe a federal tax offset was applied in error, contact the IRS directly at 800-829-1040 for clarification. For inquiries regarding other debt-related offsets, you can reach the Treasury Offset Program at 800-304-3107 for further information.

For additional tax information, explore FASTNET’s taxes cheat sheet and our roundup of crucial tax deadlines for the upcoming tax season.