Just a few days ago, the IRS informed that there are still millions of dollars that certain taxpayers are legally entitled to. Some $917 million is available in unclaimed refunds to approximately 984,000 taxpayers who did not file their taxes for 2009.
It is plausible that many taxpayers decided not to file taxes for that year coming to conclusion that they simply didn’t earn enough to file returns. But as long as money was withheld from your paycheck or you made estimated quarterly payments, you may qualify for a refund. The IRS estimates that overall more than half of all refunds are larger than $500. The most taxpayers live in California (more than 100,000), followed by Texas (86,000), Florida and New York (both 62,700). Although median refund is estimated to be larger than $500, in states such as New York median refund is $620, in Alaska $658, and Wyoming $657.
How to claim the refund for 2009
The first step is to file taxes for earnings generated in 2009. Taxpayers who decide to do that have until April 15, 2013 to file tax returns. Those returns cannot be e-filed and have to be filed on paper and send to the appropriate IRS location. Any amount that remains unclaimed after April 15 will become a possession of the U.S. Treasury.
Taxpayers should verify if they have the required documents to prepare tax returns. At the minimum, those documents include W-2s, 1098, 1099, or 5498 to show income generated that year. If you don’t have copies of those documents, you can ask the employer at that time to provide you one or request help from the IRS. Because employers provides all your income information to the IRS, you can file Form 4506-T Request for Transcript of Tax Return, and the IRS will send you the reported amounts. Those transcripts will lack the level of detail of W-2s but at least will allow you to get started.
Taxpayers who qualify for a refund do not face penalties because they don’t owe government any amount; merely claiming what’s theirs. On the flip side, the IRS says that any potential refund will be first applied to any tax obligations for 2010 or 2011, unpaid child support, or any type of federal debt that’s due.
What about Earned Income Tax credit?
Low-income taxpayers who decided not to file taxes for 2009 may also be missing out on the Earned Income Tax credit. The maximum credit for that year was $5,657 but in order to receive it, you have to file tax returns. The EITC thresholds for 2009 were: