Unclaimed funds: IRS has $1B waiting to be claimed

2024-04-13 - Claire Grant

With Tax Day looming over the country, by April 15 most households in America will file their tax return. For Illinoisians, tax time can be especially difficult, as a yearly report from WalletHub on States with the Highest & Lowest Tax Rates found Illinois at the very top of the totem pole with the highest tax rates in the country.

There may be a way to lift that weight off of households’ shoulders, as according to the IRS more than $1 billion in federal tax refunds are still unclaimed from COVID-19 era policy.

Here’s what you need to know.

Am I eligible?

If households did not file a tax return during the height of the pandemic for the 2020 tax return year and believe they missed a tax return, the agency said the roughly $1 billion is still on hold for eligible filers to claim and retake for the lost year.

When is the deadline to make a claim?

The window created by the pandemic made filing strange in 2020 with an extension of the common three-year filing window but the open window is starting to shut. Households only have until May 17 of this year to claim their tax refund for 2020 before it’s too late.

Is filing any different?

To file for a 2020 tax refund, it’s like filing any other tax refund for previous years; residents of Illinois can file themselves or go to professional help like TurboTax or H&R Block using documents from the 2020 tax refund year.

What if I’m missing documents?

For missing documents since it’s been almost half a decade, the IRS resources allow transcripts online on IRS.gov or last ditch, asking for copies of old documents from employers’ works too.

Yes, Illinois taxes are as bad as you think

The IRS says the median refund for the pandemic fiscal year is around $932; which may help Illinoisians who have yet to file their 2020 return and are filing for 2023 at the same time.

In the study conducted by WalletHub, tax rates were determined on a median household income of $75,586 with a $281,900 house and car valued at

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$26,420.

By overall effective state & local tax rates, income tax, real-estate tax and sales taxes on a scale from one (lowest) to 51 (highest) with 25 as average.

In the studies finding, Illinois ranks overall 51 (including District of Columbia) in the country for tax rates.

● Illinois ranked 51 in Overall Effective State & Local tax rates

● Illinois ranked 47 in Income tax

● Illinois ranked 50 in Real-Estate tax

● Illinois ranked tax

Currently, Illinois has a 4.95% individual income tax rate, a 9.50% corporate income tax rate, a 6.25% state sales tax rate and a 4.75% local sales tax rate.

On Feb. 21, Gov. J.B. Pritzker proposed his 2025 budget which outlined proposed tax changes for the upcoming year. 32 in Sales & Excise