IRS might owe you money: Here’s how to find out
Income tax time has come and gone for most people. But the Internal Revenue Service could be sitting on tens of millions of dollars in unclaimed refunds due to Alabama taxpayers, and it’s not too late for them to claim their money.
Here’s the key thing: A taxpayer who owes money and doesn’t file a return may find themselves in hot water. But if a taxpayer has a refund coming and doesn’t file a return, there’s no penalty – no penalty other than missing out on the refund, that is.
It gets better. A tardy filer has three years from the original due date to file a return and claim that overdue refund.
Back in April, as the annual filing deadline approached for 2024 returns, the IRS estimated that it was sitting on more than a billion dollars in refunds that hadn’t been claimed because taxpayers hadn’t filed their 2021 returns.
Breaking it down by state, the IRS estimated that 18,100 individuals in Alabama were about to forfeit a little over $16 million in potential refunds, for a median individual refund of $743. That’s not even counting refundable tax credits such as the Earned Income Tax Credit or COVID-era Recovery Rebate Credits.
Now that April has come and gone, those particular dollars likely are lost. “After the expiration of the three-year period, the refund statute generally prevents the issuance of a refund check and the application of any credits, including overpayments of estimated taxes or withholding amounts, to other tax years that are underpaid,” said the IRS in its April reminder. “If a taxpayer does not file within the three-year window, the money goes to the U.S. Treasury.”
Still: If you didn’t file a 2022, 2023, or 2024 return and you could have gotten a refund, you can still get it. There is “no penalty for claiming a refund on a late-filed tax return,” says the service, so you might as well go for it. Getting the necessary documents in hand may take some work, and here’s what the IRS advises on that point:
- Individual taxpayers can create or access their IRS Online Account on IRS.gov at Online Account for individuals. In addition to Forms W-2, 1095-A and 1099-NEC, people can view key details from their most recent tax return, such as adjusted gross income.
- Taxpayers who are missing Forms W-2, 1098, 1099 or 5498 for the years 2021, 2022 or 2023 can request copies from their employer, bank, or other payers.
- Tax year 2021 Forms 1040 and 1040-SR and instructions are available on the IRS.gov Forms, instructions and publications page or by calling toll-free 800-TAX-FORM (800-829-3676).
- Taxpayers who are unsure if they are required to file a return can visit Do I need to file a tax return? or refer to Publication 17, Your Federal Income Tax (For Individuals).
Failing to file a return isn’t the only way people can miss out on a refund. It’s possible, for example, that a return you thought you filed didn’t go through, or that the IRS is waiting on more information from you, or that a check got lost in the mail.
In such cases, the IRS’ “Where’s My Refund?” page might help. It can tell you if your return was received and whether a refund has been issued. To use the page, you’ll need your Social Security or individual taxpayer ID number (ITIN), your filing status and the exact refund amount on your return.
The page advises that filing a second return won’t make necessarily make things go faster and might confuse the situation. Taxpayers shouldn’t file again unless they’re due a refund, they’ve been waiting for more than six months and “Where’s My Refund?” doesn’t show that a return was received.