Is an unclaimed tax refund waiting for you?

Posted on March 28, 2017

People don’t claim their federal income tax refunds for all kinds of reasons. Sometimes they are not aware that they have a refund coming. If you suspect an “orphan” sum of money is waiting for you, contact us at Teipen Selanders Poynter & Ayres.

According to the IRS, there are many “orphan refunds”. More than one billion unclaimed federal dollars are waiting to be claimed by an estimated one million taxpayers. Almost 22,000 of those live in Indiana.

Indiana estimates of individuals who may be due 2013 tax refunds: 

“Some students and seniors may not even realize they’re due a tax refund,” said CPA Barry Sapurstein. “Remember, there’s no penalty for filing a late return – even from 2013 — if you’re due a refund.”

What does the law say about refunds from former years? In cases where a tax return was not filed, the law provides most taxpayers with a three-year window of opportunity for claiming a refund. Wait longer than three years and the money becomes the property of the U.S. Treasury. For 2013 tax returns, the law requires taxpayers to properly address mail and postmark the tax return by April 18, 2017.

What’s the catch? “Taxpayers seeking a 2013 refund may not be able to receive it even with proper paperwork if they have not filed tax returns for 2014 and 2015,” cautioned Barry Sapurstein, CPA. “Any refund must also be applied to any amounts still owed to the IRS, or a state tax agency, he adds, and may be used to offset unpaid child support or past due federal debts, including student loans.”

Filing a late return can still help your tax situation in another interesting way. Many low-and-moderate income workers may have been eligible for the Earned Income Tax Credit (EITC). For 2013, the credit was worth as much as $6,044. The EITC helps individuals and families whose incomes are below certain thresholds.

Not sure you have all the documents you need to file for 2013? Teipen Selanders Poynter & Ayres can help you retrieve current and prior year tax forms. Taxpayers who are missing Forms W-2, 1098, 1099 or 5498 for the years 2013, 2014 or 2015 should request copies from their employer, bank or other payer.

The window of opportunity is closing soon. In order to file for a 2013 tax refund, taxpayers must file a 2013 tax return with the IRS no later than this year’s tax deadline, Tuesday, April 18. Let’s make sure you get what’s rightfully yours.