The Internal Revenue Service (IRS) estimates it owes $1.3 billion worth of unclaimed tax refunds for 2017. And today is the last day by which people can file for a 2017 refund from the agency.
According to the feds, many people don’t realize they qualify for an Earned Income Tax Credit (EITC), which became available to low wage earners during recent years. Some 1.3 million people who didn’t file income tax returns for 2017 are eligible for a refund.
The IRS has to set aside unclaimed income tax refunds for three years. But if you fail to file for a refund after three years, by law, the money belongs to the U.S. Treasury, CNet reports.
How to Check Your Eligibility
Unfortunately, there’s only one way to find out if the IRS owes you money, and that is to file a return for 2017. While the IRS has managed to estimate the total amount it owes, it won’t know if a specific taxpayer is eligible for a refund unless they file a return.
What’s more, it’s possible you will need to file a 2018 and 2019 return as well in order to get the IRS to release your 2017 refund. It’s a hassle, but then, so is paying taxes.
To get your refund, you have to submit a 2017 tax form either online or by mail, in which case it has to be postmarked May 17.
IRS Income Tax Return Backlog Is Getting Worse
Meanwhile, the IRS has been playing catch-up on millions of income tax returns, which will delay refunds for many people, CBS News reports.
The Taxpayer Advocate Service, an independent branch of the IRS, claims the IRS is saving nearly 31 million returns for manual processing. That number has increased by 2 million returns since mid-April, National Taxpayer Advocate Erin M. Collins told CBS.
“I was hoping it would go down, but I’m not that optimistic,” she said of the backlog. “Taxpayers will continue to experience unusually long delays. I don’t think anyone wants to hear that, but that is the case.”
The IRS did fall behind on processing 2019 tax returns due to the pandemic. But much of the backlog reportedly stems from 2020 tax returns.
Many of the newer tax returns are hitting snags because of recent tax law changes and confusion over federal stimulus checks, Collins explained. Roughly 1 in 3 people who claimed a Recovery Rebate Credit have had their returns flagged for review by an IRS employee, and that adds extra time to the process.