The IRS is sitting on $1.4 billion in unclaimed tax refunds, and taxpayers are running out of time to grab their cash.
These tax refunds are from 2015, and they belong to about 1.2 million taxpayers who didn’t file a return that year, according to the IRS.
In order to claim the money, taxpayers must submit their 2015 tax returns by April 15. If these people fail to turn in their Form 1040, the cash goes to the U.S. Treasury.
Generally, you have three years from the due date of your tax return to claim your refund.
The IRS may continue to hold your 2015 refund if you haven’t submitted returns for 2016 and 2017.
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“Most likely if you have an unclaimed refund, you just never filed your return,” said Susan Allen, CPA and senior manager of tax practice and ethics for the American Institute of CPAs.
“The common thing is that maybe you thought you didn’t have a filing requirement or your income is too low, but you could still be entitled to a refund,” she said.
There is no penalty for submitting a late return if you’re due a refund.
The IRS isn’t as kind to late filers with balances due; those taxpayers are on the hook for penalties.
Generally, once your income reaches a certain level, you need to file.
For the 2018 tax year, single filers under 65 are required to submit a return if their gross income was at least $12,000. For married couples under 65, the threshold is $24,000.
If you’re 65 and over, you’ll need to file if your gross income is at least $13,600.
That number goes up to $25,300 for married couples if one spouse is over 65, and $26,600 if both are at least that age.
Your dependents aren’t necessarily off the hook for filing, either.
Whether your kids must file a return will depend on whether they had earned or unearned income.
For 2018, single dependents under age 65 must file a return if they had unearned income — that is, income from taxable interest, dividends and capital gains — over $1,050, according to the IRS.
They must also file a return if their earned income — money from salaries, wages, and tips — exceeds $12,000.
Just because you don’t have to file, doesn’t mean you should skip it.
For instance, low-income filers might be eligible for the earned income tax credit.
This tax break is more generous for families: Filers with no kids can get a maximum credit of $519 for the 2018 tax year, but the break goes up to $6,431 for taxpayers with 3 or more kids.
The catch is that you need to file your return in order to claim the credit.