Deadline nears for unclaimed 2018 federal income tax refunds 

More than $68 million in unclaimed income tax refunds may be waiting for tens of thousands of taxpayers in Iowa and Illinois who did not file their 2018 federal income tax return – but time is running out to claim it. 

According to the Internal Revenue Service (IRS), an estimated 1.5 million taxpayers nationwide have unclaimed income tax refunds totaling almost $1.5 billion because they did not file a 2018 Form 1040 federal income tax return. By law, there is a three-year window to claim these refunds, but the April tax deadline is fast approaching.  

“The IRS wants to help people who are due refunds but haven’t filed their 2018 tax returns yet,”  IRS Commissioner Chuck Rettig said in a news release. “But people need to act quickly.”

For 2018 tax returns, the window closes April 18, 2022, for most taxpayers, the IRS said. The law requires taxpayers to properly address, mail and ensure the tax return is postmarked by that date. If they do not file a tax return within three years, the money becomes the property of the U.S. Treasury.

“We want to help people get these refunds, but they need to file a 2018 tax return before this critical deadline,” Mr. Rettig said. 

The IRS estimates the midpoint for the potential refunds for 2018 to be $813 — that is, half of the refunds are more than $813 and half are less.

In Iowa, 14,843 taxpayers could be eligible for a total of $14.25 million in refunds. In Illinois, the IRS said 55,767 taxpayers are eligible for more than $54.85 million. The IRS estimates the median potential refund could be $840 for taxpayers in both states.

The IRS reminds taxpayers seeking a 2018 tax refund that their checks may be held if they have not filed tax returns for 2019 and 2020. In addition, the refund will be applied to any amounts still owed to the IRS or a state tax agency as well as used to offset unpaid child support or past due federal debts, such as student loans.

Tax year 2018 returns must be filed with the IRS center listed on the last page of the current Form 1040 instructions. Current and prior year tax forms (such as the tax year 2018 Form 1040, 1040A and 1040EZ) and instructions are available at IRS.gov Forms and Publications page or by calling toll-free 800-TAX-FORM (800-829-3676). However, taxpayers can e-file tax year 2019 and later returns.

Taxpayers who are missing Forms W-2, 1098, 1099 or 5498 for the years 2018, 2019 or 2020 should request copies from their employer, bank or other payer. Taxpayers who are unable to get missing forms can order a free wage and income transcript at IRS.gov using the Get Transcript Online tool or file Form 4506-T to request the transcript.

By failing to file a tax return, people stand to lose more than just their refund of taxes withheld or paid during 2018. Many low- and moderate-income workers may be eligible for the Earned Income Tax Credit (EITC), which was worth as much as $6,431 in 2018. 

 

Get the free QCBJ email newsletter

Stay up-to-date with the people, companies and issues that impact business in the  Quad Cities area.