Unclaimed Tax Refunds in Alabama
As tax season approaches, it seems the Internal Revenue Service is holding onto quite a bit of unclaimed money—specifically, tens of millions of dollars in refunds from taxpayers in Alabama. The good news? It’s still possible for them to claim that cash.
Here’s the main takeaway: If taxpayers don’t submit their returns but manage to receive a refund, they won’t face any penalties. The only hiccup is the chance to miss out on that refund.
For those who do file late, there’s a three-year window from the original deadline to claim their refunds. So, if someone is delayed, they can still get what they’re owed.
In April, as the annual deadline nears for the 2024 return, the IRS indicated that more than $1 billion in refunds from 2021 remain unclaimed. A big portion of this is due to taxpayers not filing their 2021 returns.
According to IRS estimates, around 18,100 people in Alabama are missing out on over $16 million in potential refunds, with a median personal refund of $743. This total doesn’t even include refundable tax credits like earned income tax credits or the Covid-era recovery rebate credits.
If taxpayers miss the April window, those funds may be permanently lost. The IRS has clarified that after three years, they can no longer issue refund checks or apply credits from other tax years with low wages. If that window closes, any unclaimed funds may go to the U.S. Treasury.
However, it’s worth noting that if you didn’t file a return for 2022, 2023, or even 2024, you can still claim the refund if you qualify. The IRS ensures that there’s no penalty for seeking a refund for a late tax return, but collecting the necessary paperwork can indeed be a bit of a hassle.
- Taxpayers can create or access an online account through IRS.gov, where they can keep track of important documents like Forms W-2, 1095-A, and 1099-NEC, as well as details from their latest tax returns.
- Be aware there may not be any Forms W-2, 1098, 1099, or 5498 for the years 2021, 2022, or 2023.
- Tax Year 2021 forms and instructions are available on the IRS website or by calling their toll-free number.
- If you’re uncertain about the necessity of submitting a return, resources are available to guide you on whether you need to file.
Missing a refund isn’t just about not filing a return, either. Sometimes, the return might not have gone through as expected or the IRS could be waiting for additional information. There’s even the possibility that a check got lost in the mail.
In such cases, the IRS’s “Where is my refund?” page could be useful. It helps taxpayers track if their return has been received and if a refund has been issued, requiring a Social Security number or an individual taxpayer ID, along with filing status and refund amount.
The page also cautions against submitting a second return, as it could complicate things further instead of expediting the process. If you’ve been in limbo for over six months wondering where your refund is, you’re not alone.
