In case you didn’t know, there’s a lot of money waiting for someone to claim it, and it could be yours. The Internal Revenue Service (IRS) has just dropped the bomb: more than one million people in the United States have not yet filed their 2021 taxes. The number that is at stake? Nothing less than $1 billion dollars distributed in tax refunds. If you do quick math, that works out to an average of $781 per person. Can you imagine finding almost 800 dollars forgotten in the pocket of an old pair of pants? Well this is similar, but with more paperwork.
Here’s the important thing: you have until April 15, 2025 to make a move. After that date, that money will not exactly disappear, but it will go directly to the coffers of the Treasury Department. Translation: If you don’t act, you’ll be giving away money that could help you pay bills, treat yourself, or even save. Don’t let time work against you, because three years sounds like a long time… until you realize that the deadline is just around the corner.
How to claim your tax refund money, pending tax year 2021
If you never filed your 2021 return, don’t worry. It’s not as complicated as it seems. You only need the specific Form 1040 for that year. Where to get it? On the IRS website, everything is available for download. Of course, forget about doing it online: this time it’s time to print, sign and send everything by traditional mail. Yes, just like old times. One tip: make copies of everything before you send it. You never know when an envelope gets lost or a dog eats your statement (well, the second is exaggerating, but better to be safe).
Here comes the good thing. In addition to what you already have for your normal declaration, there are two credits that could increase your final amount:
- Pandemic Recovery Credit (Recovery Rebate Credit): Remember those COVID stimulus payments? If for some reason you did not receive yours in 2021, this credit is your second chance. You just have to include it when filing your taxes for that year.
- EITC (Earned Income Credit): This is a lifesaver for low to moderate earners. Depending on your family situation (if you have children, for example), you could add up to $6,728 to your refund. Yes, almost seven thousand dollars. Is it worth checking out? Of course.
There is one more detail that you must keep in mind to receive the tax refund.
Now, be careful with this: even if you are claiming money for 2021, the IRS is going to ask you to have your 2022 and 2023 returns up to date. If you have not submitted them, they can freeze your refund until you regularize everything. The reason? They want to make sure you don’t owe them anything from recent years. So if you’re behind on more current taxes, catch up first. Think of it as bartering: you give them what you owe them (if anything), and they give you what they owe you.
Don’t worry. The IRS does not require that you have filed prior returns to claim this refund. Of course, you will need all the documentation for 2021: W-2, 1099s, deduction receipts… If you don’t have them, contact your employer or the institutions that paid you that year. And if all else fails, the IRS offers free income transcripts on its website.