Time running out to claim $1.4 billion in old tax refunds

Detroit Free Press

Who walks away from $1.4 billion in tax refunds?

The Internal Revenue Service is alerting 1.2 million taxpayers who didn’t file a 2015 federal income tax return that they’re eligible for $1.4 billion in unclaimed federal refunds.

To get the money, though, you’d need to file that 1040 return for 2015 by April 15. There’s no other way to find out if you’re owed that money. (Taxpayers in Maine and Massachusetts have until April 17.)

The IRS figures are an estimate and reflect W-2 withholding information.

In Michigan, about 39,700 people may be due about $45.5 million in unclaimed federal income tax refunds.

The IRS estimates that about half the refunds in Michigan could be worth more than $873. The other half would be worth less than that amount. That's about the same as the median of $879 nationwide.

Taxpayers who have not yet filed their 2015 tax returns have until April 15 to file, if they hope to receive money in unclaimed federal income tax refunds for their 2015 federal income tax returns.

Some people may be owed far more if they also qualify for valuable tax credits, such as the Earned Income Tax Credit.

Other states have even more money owed in old, 2015 tax refunds: Ohio, $47.4 million; Illinois, $54.8 million; New York, $77.66 million; Florida, $95.7 million; California, $124.4 million and Texas, $158.2 million.

Who leaves that kind of money on the table?

In some cases, experts who deal with unclaimed property say some people just don’t want to be found. They might have other debts. They might owe child support, for example, and they know they won’t see that money anyway.

The IRS can take or reduce your tax refund to cover money still owed to the IRS from previous tax years. Past-due child support could cut into your refund amount, too.

The IRS reminds taxpayers seeking a 2015 tax refund that their checks may be held if they have not filed tax returns for 2016 and 2017, too.

In addition, the IRS said the old 2015 refund could be applied to any amounts still owed to the IRS or a state tax agency. And it may be used to offset unpaid child support or past due federal debts, such as student loans.

In many other cases, some people don't claim their refund money because they aren't all that tax savvy. They don’t realize that they had money withheld from a part-time job and could be owed a tax refund.

Some unclaimed tax refund money could belong to students or others who may have overlooked filing a return.

Or they might not realize that they're losing more than their refund of taxes withheld or paid in 2015.

Many low- and moderate-income workers may be eligible for even more money through the Earned Income Tax Credit. Again, you need to file a tax return to get that money.

For 2015, the credit was worth as much as $6,242. It could be far less, depending on your income and situation.

The EITC helps individuals and families whose incomes are below certain thresholds. For 2015, the thresholds were:

$47,747 ($53,267 if married filing jointly) for those with three or more qualifying children;
$44,454 ($49,974 if married filing jointly) for people with two qualifying children;
$39,131 ($44,651 if married filing jointly) for those with one qualifying child, and;
$14,820 ($20,330 if married filing jointly) for people without qualifying children.

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And many times, life just gets in the way. Some couldn’t get everything together back in 2015 and they just thought they’d skip filing a return at all.

A new , compact 1040 rolls for 2018 federal income tax returns. But many tax filers will still need to use schedules to file their returns.

Now, some might think they’d owe a penalty for not filing a timely tax return.

No penalty applies for filing late — if you're owed a refund.

Most taxpayers have a three-year window for filing a return to claim a refund. After the three years, the money becomes the property of the U.S. Treasury.

You’d face penalties for filing late and paying late if you owed taxes and didn’t file a return on time or seek an extension.

Taxpayers who are missing forms, such as a W-2, can request that information from their employer or others.

According to the IRS, Taxpayers who are unable to get missing forms from their employer or other payer can order a free wage and income transcript at IRS.gov using the Get Transcript Online tool.

Alternatively, the IRS said, they can file Form 4506-T to request a wage and income transcript. A wage and income transcript shows data from information returns received by the IRS, such as Forms W-2, 1099, 1098, Form 5498 and IRA contribution information. Taxpayers can use the information from the transcript to file their tax return.

ContactSusan Tompor at313-222-8876 or stompor@freepress.com. Follow her on Twitter@tompor. Read more on business and sign up for our business newsletter.