The United States Internal Revenue Service (IRS) announced on Tuesday, March 11, that over $1 billion in 2021 tax refunds have yet to be claimed, with an estimated 1.1 million taxpayers eligible for refunds but have not filed their federal income tax returns to apply.
The IRS estimates the median amount of these refunds to be $781, not including various applicable tax credits.
In some states, the potential refund amounts are even higher, with median refunds possibly exceeding $900 in states such as Pennsylvania, Massachusetts, and Rhode Island.
Additionally, according to IRS data, both California and Texas have over 100,000 taxpayers who may be eligible for refunds, while New York, Florida, and Pennsylvania also have a significant number of taxpayers who have not applied for refunds.
To claim a refund, if you are eligible, you typically need to submit your federal income tax return. U.S. taxpayers usually have three years to claim a refund, after which unclaimed funds will revert to the U.S. Department of the Treasury.
The final deadline for filing 2021 tax refund claims is April 15, 2025, with an exception for the Recovery Rebate Credit (RRC).
In December 2024, the IRS announced that over one million taxpayers may have missed out on claiming the Recovery Rebate Credit, which could be applied for in the 2021 tax return.
Upon reviewing internal data, the IRS found that many eligible taxpayers had filed their 2021 tax returns but did not claim the RRC. These taxpayers may have failed to fill out the RRC section or mistakenly inputted “$0,” resulting in not receiving the credit.
Ultimately, the IRS decided to automatically issue RRC payments to eligible taxpayers, with each person eligible for up to $1,400, totaling approximately $2.4 billion.
These payments were automatically issued in December 2024 and were to be sent to taxpayers via direct deposit or paper check by the end of January 2025.
If you are eligible for other tax credits in addition to RRC (such as EITC), you still need to submit your 2021 tax return to claim them.
For the 2021 Earned Income Tax Credit (EITC), the maximum credit can reach $6,728, with income thresholds for that year as follows:
– Three or more qualifying children: annual income not exceeding $51,464 (when filing jointly not exceeding $57,414).
– Two qualifying children: annual income not exceeding $47,915 (when filing jointly not exceeding $53,865).
– One qualifying child: annual income not exceeding $42,158 (when filing jointly not exceeding $48,108).
– No qualifying child: annual income not exceeding $21,430 (when filing jointly not exceeding $27,380).
Additionally, some taxpayers may qualify for refunds due to over-withheld taxes or excess quarterly tax payments. Even if your income is low enough that you are not required to file taxes, you may still be eligible for a refund, but refundable tax credits (such as EITC) must be claimed through a tax return.
If you owe federal student loans, taxes, or other unpaid federal debts (such as child support), your refund may be used to offset those debts.
Moreover, if you have not filed tax returns for 2022 or 2023, the IRS may withhold your 2021 tax refund until you file for those years.
If you use tax software, you can typically find your 2021 tax return under the “Prior Years” option.
If you opt for paper filing, you can download the 2021 tax forms and filing instructions from IRS.gov under “Forms and Publications,” or call 800-TAX-FORM (800-829-3676) to request paper forms by mail.
If you have not filed taxes before, you may not have retained your 2021 tax documents. You need to gather W-2, 1098, 1099, or 5498 forms to file for a refund. If you do not have these documents, you can request copies from your employer, bank, or financial institution.
You can also download or print your tax records and filing documents from the IRS website:
1. Log in to IRS.gov and access “Individual Online Account.”
2. If you do not have an account, you need to register and verify your identity.
3. You can also use Form 4506-T to request a Wage and Income Transcript, with mail-in applications taking several weeks to process while online applications are faster.
(Adapted from reports by “The Hill” and “Forbes”)