Some Americans may still be eligible for pandemic-related stimulus payments, but time is running out. The IRS has announced that about 1.1 million people have approximately $1 billion in unclaimed refunds for the 2021 tax year. To access this money, individuals must file their tax returns by April 15.
According to the IRS, taxpayers generally have three years to file and claim their refunds. If they miss this deadline, the funds will go to the U.S. Treasury. This year, there’s added urgency due to the pandemic relief payments. Many who qualified for these payments may not have received them, especially if they didn’t file taxes for 2021.
The IRS has highlighted that three rounds of Economic Impact Payments (EIPs) were issued between March 2020 and March 2021, totaling $814 billion. Eligible individuals received payments of up to $1,200 per adult and $500 per child in March 2020, followed by $600 per adult and child in December 2020, and $1,400 per adult and child in March 2021.
The IRS has found that around 1 million taxpayers who were eligible for the Recovery Rebate Credit did not claim it on their 2021 returns. Some may have left the relevant field blank or mistakenly entered $0. To rectify this, the IRS plans to send notifications and payments of up to $1,400 to eligible individuals soon.
For those who didn’t file taxes in 2021, it’s crucial to act quickly. They can still claim the Recovery Rebate Credit by submitting their tax return before the April deadline. The IRS emphasizes that even if income was minimal or nonexistent, filing is necessary to claim any credits.
To assist taxpayers, the IRS encourages them to start gathering necessary documents now. The easiest way to find information is through an IRS online account. Taxpayers can request copies of important documents from their employers or banks, or ask the IRS for a transcript of their tax return.
As the tax season unfolds, the IRS reminds everyone that their 2021 refunds might be delayed if they haven’t filed returns for 2022 and 2023. Additionally, any refund owed for 2021 could be used to pay off debts owed to the IRS or other agencies.
This tax season is expected to be particularly challenging due to recent cuts to IRS staffing and funding. Over 6,000 positions were eliminated recently, which may hinder the agency’s ability to assist taxpayers effectively. While the IRS received funding from the Inflation Reduction Act in 2022 to improve services, budget cuts have raised concerns about the agency’s capacity to handle inquiries and process returns.
The IRS advises taxpayers to check its online resources for help before reaching out directly. With the April 15 deadline approaching, it’s essential for eligible individuals to take action now to ensure they don’t miss out on their refunds.