Time is dwindling for 1.5 million taxpayers to get unclaimed 2019 tax refunds
Nearly 1.5 million Americans still have time to get their unclaimed 2019 tax refunds worth a median amount of $893. But time to do so is running out.
The Internal Revenue Service said it is holding about $1.5 billion in unclaimed tax refunds for the 2019 tax year. Taxpayers who are owed a refund have three years from the original tax deadline to claim them. Because the IRS moved the deadline to file 2019 tax returns to July 17, 2020, because of the pandemic, the deadline to claim these refunds is July 17 of this year.
If taxpayers don’t file their 2019 tax returns to receive their unclaimed refund, the money becomes the property of the U.S Treasury.
"With the pandemic taking place when the 2019 tax returns were originally due, people may have simply forgotten about tax refunds with the deadline that year postponed all the way into July," IRS Commissioner Danny Werfel said in a statement. "We frequently see students, part-time workers, and others with little income overlook filing a tax return and never realize they may be owed a refund. We encourage people to review their records and start gathering records now, so they don't run the risk of missing the July deadline."
Some taxpayers do not file a tax return because they didn't earn enough money to be required to file and they face no penalty if they are owed a refund, according to the IRS.
While the median unclaimed 2019 refund is $893 half of those 1.5 million taxpayers would get more, especially considering that, in 2019, eligible taxpayers could get up to $6,557 if they were eligible for the Earned Income Tax Credit (EITC).
The states with the largest median refunds are New Hampshire ($974), Massachusetts ($966), West Virginia ($959), North Dakota ($958), and Wyoming ($949), according to IRS data. The states with the most taxpayers with unclaimed refunds are California (144,700), Texas (135,300), Florida (89,300), New York (81,600), and Pennsylvania (56,000).
How to file an old return
You can’t electronically file your 2019 return.
“Taxpayers would need to file a paper return and send it to the IRS by certified mail, so you can confirm it was received,” Adam Brewer, a tax lawyer at AB Tax Law, told Yahoo Finance. “And follow up with the IRS to make sure they process it and issue you the refund.”
Tax forms for 2019 — such as the 1040 and 1040-SR — are available on the IRS Forms, Instructions & Publications website or by calling toll-free 800-TAX-FORM (800-829-3676).
“If low-income folks still have unclaimed tax refunds, they can head to their nearest VITA (Volunteer Income Tax Assistance) site to get support in filing tax returns from past years,” Joanna Ain, associate director of policy at Prosperity Now, told Yahoo Finance. “VITA volunteers can help individuals access critical credits, like the Earned Income Tax Credit (EITC) and the Child Tax Credit (CTC), to make sure families do not miss out.”
Even though the deadline to claim 2019 refunds is July 17, taxpayers shouldn’t wait until the deadline to file.
“Taxpayers should plan ahead to find the necessary information, as some written requests can take several weeks to obtain them,” Dwight Nakata, a certified public accountant at YNCPAs, told Yahoo Finance. “Taxpayers can request copies of key tax documents — such as Form W-2, 1098, 1099 or 5498 for years 2019, 2020, or 2021 — by requesting copies from employers, banks, or other payers.”
Taxpayers can also request a free wage and income transcript by filing Form 4506-T on IRS.gov using the Get Transcript Online tool.
A tax refund can be withheld if taxpayers have not filed returns for 2020 and 2021. Also, a refund could be held by the IRS or state tax agencies to pay any unpaid child support or past due federal debts like federal student loans.
Because 2019 tax returns must be paper filed, experts recommend sending it by certified mail to have proof of receipt, especially if you wait until the deadline to file.
“If you file and do not receive your tax refund and it has been less than a year, you can try using the IRS unclaimed refund database,” Nakata said. “If it has been more than a year, you can try using Form 3911, the Taxpayer Statement Regarding Refund, or call the IRS at (800) 829-1954.”
Ronda is a personal finance senior reporter for Yahoo Finance and attorney with experience in law, insurance, education, and government. Follow her on Twitter @writesronda
Read the latest financial and business news from Yahoo Finance
