Unclaimed Refunds (April 2017)

Tax Tips

$1 Billion in Unclaimed Tax Refunds.

By Michael Aston, E.A.
Alhambra Tax Center


The deadline to file your 2016 tax return is April 18, 2017 (and extensions too).

There’s roughly 1 million people who are owed around $1 billion dollars in refunds for taxable year 2013. If you haven’t filed your 2013 income tax return, your statute expires on April 18, 2017. That means, you lose the refund.

Based on the March 3 IRS bulletin her are some facts about unclaimed refunds:

·       The unclaimed refunds apply to people who did not file a federal income tax return for 2013.

·       Some people, such as students and part-time workers, may not have filed because they had too little income to require them to file a tax return. They may have a refund waiting if they has taxes withheld or if they qualify for certain tax credits.

·       The law generally provides a three-year window to claim a tax refund. For 2013 returns, the window closes on April 18, 2017

·       The law requires that the taxpayer properly address, mail and postmark their returns by April 18, 2017, to claim their refund.

·       After three years unclaimed refunds become property of the U.S. Treasury. There is no penalty for filing a late return if the taxpayer is due a refund.

·       The IRS may hold 2013 refunds if taxpayers have not filed tax returns for 2014 and 2015. The U.S. Treasury will apply the refund to any federal or state tax owed. Refunds may also be held to offset unpaid child support or past due federal debts such as student loans.

·       Taxpayers who are missing forms W-2, 1098, 1099 or 5498 for prior years should ask for copies from employers, banks or other payers. Taxpayers who can’t get these copies can request a wage and income transcript either at www.irs.gov or by mail. Taxpayers can also file a Form 4506-T to get a transcript.

·       The three year window also usually applies to a refund from an amended return. In general, you must file a form 1040X Amended U.S. Individual Income Tax Return, within three years from the due date you filed the original return. That means the deadline for most people to amend their 2013 tax return and claim a refund will expire April 18, 2017.

The State of California has a four (4) year statute (and the IRS has a three year statute). The deadline to file for a refund for your 2012 return will be April 18, 2017. Just like the IRS – use it, or lose it.

For more information you can go to www.irs.gov for the federal return, www.ftb.ca.gov for the California return or speak to your tax professional.