The Internal Revenue Service has unclaimed federal income tax refunds totaling more than $1 billion that may be waiting for an estimated 1 million taxpayers who did not file a 2013 federal income tax return. But time is running out. To claim this money, taxpayers must file a 2013 federal tax return by April 18, 2017.
The law provides most taxpayers with a three-year window of opportunity for claiming a refund. If they do not file a return within three years, the money becomes the property of the U.S. Treasury.
Some people, such as students and part-time workers, may not have filed because they had too little income to require them to file a tax return. They may have a refund waiting if they had taxes withheld from their wages or made quarterly estimated tax payments. Some taxpayers could also qualify for certain tax credits, such as the Earned Income Tax Credit (EITC), but they need to file a tax return to claim the credit.
Low- and moderate-income workers whose incomes fall below certain limits often qualify for the EITC, which for 2013 was worth as much as $6,044. The income limits for 2013 were:
$46,227 ($51,567 if married filing jointly) for those with three or more qualifying children;
$43,038 ($48,378 if married filing jointly) for people with two qualifying children;
$37,870 ($43,210 if married filing jointly) for those with one qualifying child, and;
$14,340 ($19,680 if married filing jointly) for people without qualifying children.
There is no penalty for filing a late return for those receiving refunds. The IRS estimates that half the potential unclaimed refunds are worth more than $763.
The IRS may hold 2013 refunds if taxpayers have not filed tax returns for 2014 and 2015.