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Nearly $1 billion in unclaimed tax refunds remain

On Behalf of | Mar 17, 2016 | Income Taxes |

In prior posts, we have noted how the slogan “it’s refund season” has inspired people to file their federal income tax returns early, so that they can get their refunds just as quickly. Because of this, millions of Americans have filed their returns well in advance of the April 18, 2016 deadline.

For countless other people, procrastination wins the day. It may be the fear of owing so much to Uncle Sam or simply not being diligent about collecting the information necessary to complete one’s tax return, but scores of people do not file their taxes and forego a refund. 

Nevertheless, procrastinators can still collect a refund, even if a year has passed since your return was due. In fact, the federal government recently announced that eligibility to collect on 2012 tax year refunds will close on April 18.

Federal law gives most taxpayers three years to collect on an eligible refund. After that time passes, and a refund is not collected, the money goes back to the U.S. Treasury. This year, the government estimates that nearly $1 billion in refunds have gone unclaimed, with the average potential refund being $718.00.

It is also estimated that the highest number of unclaimed refunds come from Texas, with 94,000 people eligible to receive money. Last year, more than 100,000 Californians stood to receive a refund from prior tax years.

To obtain a  past refund, the IRS requires that tax returns be filed for prior years as well; so to receive a refund for the 2012 tax year, returns for the 2013 and 2014 tax years must be filed as well. 

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