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IRS unclaimed refunds of $1.5 billion waiting for tax year 2016; taxpayers face July 15 deadline

Read the July 1, 2020 IRS news release, "IRS unclaimed refunds of $1.5 billion waiting for tax year 2016; taxpayers face July 15 deadline" here:

Unclaimed income tax refunds worth more than $1.5 billion await an estimated 1.4 million individual taxpayers who did not file a 2016 federal income tax return, according to the Internal Revenue Service.

"The IRS wants to help taxpayers who are owed refunds but haven't filed their 2016 tax returns yet," said IRS Commissioner Chuck Rettig. "Time is quickly running out for these taxpayers. There's only a three-year window to claim these refunds, and the window closes on July 15. To claim the refund, a return for tax year 2016 must be filed by July 15, 2020."

In Notice 2020-23 (PDF), the IRS extended the due date for filing tax year 2016 returns and claiming refunds for that year to July 15, 2020, as a result of the COVID-19 pandemic. As the IRS is issuing Economic Impact Payments to Americans, the agency urges taxpayers who haven't filed past due tax returns to file now to claim these valuable refunds.

To collect refunds for tax year 2016, taxpayers must file their 2016 tax returns with the IRS no later than this year's extended tax due date of July 15, 2020.

The IRS estimates the midpoint for the potential refunds for 2016 to be $861 — that is, half of the refunds are more than $861 and half are less.

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 tax refund. If they do not file a tax return within three years, the money becomes the property of the U.S. Treasury.

For 2016 tax returns, the window closes July 15, 2020, for most taxpayers. The law requires taxpayers to properly address, mail and ensure the tax return is postmarked by the July 15 date.

The IRS reminds taxpayers that there is no penalty for filing late when a refund is involved. Taxpayers seeking a 2016 tax refund should know that their checks may be held if they have not filed tax returns for 2017 and 2018. In addition, the refund will be applied to any amounts 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.

By failing to file a tax return, people stand to lose more than just their refund of taxes withheld or paid during 2016. Many low- and moderate-income workers may be eligible for the Earned Income Tax Credit (EITC). For 2016, the credit was worth as much as $6,269.

The EITC helps individuals and families whose incomes are below certain thresholds. The thresholds for 2016 were:

  • $47,955 ($53,505 if married filing jointly) for those with three or more qualifying children;
  • $44,648 ($50,198 if married filing jointly) for people with two qualifying children;
  • $39,296 ($44,846 if married filing jointly) for those with one qualifying child, and;
  • $14,880 ($20,430 if married filing jointly) for people without qualifying children.

Current and prior year tax forms (such as the tax year 2016 Form 1040, 1040-A and 1040-EZ) 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 2016, 2017 or 2018 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 mail 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.

State-by-state estimates of individuals who may be due 2016 income tax refunds

State or DistrictEstimated Number of IndividualsMedian Potential RefundTotal Potential Refunds*
Alabama23,300$859$24,614,400
Alaska5,500$979$6,754,900
Arizona32,400$762$32,281,600
Arkansas13,400$822$13,798,800
California130,600$816$135,981,300
Colorado27,500$809$28,276,500
Connecticut14,300$930$16,213,300
Delaware5,600$878$6,114,500
District of Columbia3,700$904$4,224,600
Florida99,000$874$105,706,400
Georgia48,600$792$49,682,700
Hawaii7,700$932$8,785,600
Idaho6,200$727$5,876,000
Illinois51,700$909$57,312,200
Indiana32,700$887$35,129,700
Iowa14,700$908$15,735,600
Kansas14,600$877$15,706,800
Kentucky18,700$869$19,517,100
Louisiana24,400$849$26,410,100
Maine5,600$802$5,482,200
Maryland28,200$873$31,619,700
Massachusetts29,900$956$34,261,900
Michigan46,600$853$49,591,400
Minnesota21,000$803$21,155,300
Mississippi12,900$777$12,931,600
Missouri32,400$828$33,522,400
Montana4,600$781$4,582,000
Nebraska7,800$845$8,081,700
Nevada15,900$859$16,922,300
New Hampshire6,500$965$7,474,300
New Jersey36,200$936$41,268,900
New Mexico9,600$833$10,219,600
New York70,300$958$80,830,100
North Carolina44,900$833$46,044,500
North Dakota4,000$949$4,539,800
Ohio52,900$841$54,542,900
Oklahoma21,000$866$22,600,000
Oregon21,400$762$21,237,200
Pennsylvania55,200$919$60,505,200
Rhode Island3,900$926$4,410,100
South Carolina17,200$769$17,323,700
South Dakota3,800$899$3,976,100
Tennessee29,000$840$29,834,800
Texas143,400$898$159,809,900
Utah11,100$766$11,037,700
Vermont2,800$892$2,897,400
Virginia37,900$827$39,977,600
Washington37,200$918$42,273,300
West Virginia7,200$921$7,830,000
Wisconsin19,900$781$19,483,100
Wyoming3,400$920$3,766,100
Totals1,418,300$861$1,518,154,900

*Excluding credits.


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