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Clock ticking to collect $1.4 billion in unclaimed tax refunds

Clock ticking to collect $1.4 billion in unclaimed tax refunds

An estimated 62,500 New York taxpayers are eligible
Clock ticking to collect $1.4 billion in unclaimed tax refunds
Th IRS headquarters building in Washington on Feb. 17, 2016.
Photographer: Andrew Harrer/Bloomberg

Want to recoup your share of $1.4 billion? 

The Internal Revenue Service is notifying taxpayers who have not filed federal income tax returns for 2015 that they may be eligible for a portion of $1.4 billion in unclaimed funds.

An estimated 1.2 million taxpayers did not file a 2015 Form 1040 federal income tax return, according to the IRS.

“Students, part-time workers and many others may have overlooked filing for 2015,” said IRS Commissioner Charles Rettig in a statement on Wednesday. “And there’s no penalty for filing a late return if you’re due a refund.”

Taxpayers must file their 2015 tax returns with the IRS no later than April 15. 

The federal agency estimates 62,500 New York taxpayers are eligible their portion of $77.6 million statewide.

The IRS estimates a potential median refund of $964 in New York, which means half will be more and half less.

That’s slightly higher than the nationwide average of $879.

Taxpayers seeking a 2015 tax refund may discover their checks may be held if they have not filed tax returns for 2016 and 2017. 

“In addition, the refund will be applied to any amounts still owed to the IRS or a state tax agency and may be used to offset unpaid child support or past due federal debts, such as student loans,” said the IRS in a news release. “By failing to file a tax return, people stand to lose more than just their refund of taxes withheld or paid during 2015.”

In cases where a federal income tax return was not filed, the law provides most taxpayers with a three-year window of opportunity to claim a refund, according to the IRS.

Afterwards, the money becomes the property of the U.S. Treasury. 

EITC ELIGIBILITY

Low- and moderate-income workers may also be eligible for the Earned Income Tax Credit (EITC), which helps individuals and families whose incomes are below certain thresholds. 

For 2015, the credit was worth as much as $6,242. 

The thresholds for 2015 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.

Current and prior year tax forms (such as the tax year 2015 Form 1040, 1040A and 1040EZ) and instructions are available on the IRS.gov Forms and Publications page or by calling toll-free 800-TAX-FORM (800-829-3676).

Taxpayers who are missing Forms W-2, 1098, 1099 or 5498 for the years 2015, 2016 or 2017 should request copies from their employer, bank or other payer. 

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, 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.

Source: IRS

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