IRS looks to refund $1.3 billion to people who didn’t file a 2017 return
WASHINGTON » While millions of people still wait and worry about when their stimulus payments will be delivered, there’s a group of folks who could receive some much-needed money from another source — if only they would file a three-year-old tax return.
The IRS says it has unclaimed income tax refunds worth more than $1.3 billion for an estimated 1.3 million taxpayers who never got around to filing a federal return for 2017.
“We want to help people get these refunds, but they will need to quickly file a 2017 tax return,” IRS Commissioner Charles Rettig said.
Filers have extra time to claim the refunds because the tax deadline has been extended from April 15 to May 17. The IRS estimates the median or midpoint for the potential refunds for 2017 to be $865.
Live in Alaska and didn’t file for 2017? The median potential refund is $960. In Maryland and Virginia, it’s $872 and $827, respectively. In the District, it’s $878. Massachusetts has the largest median refund at $978.
By law, taxpayers have three years to claim a refund. So May 17 is the last chance to get your money for the 2017 tax year. Filing may also open the door to the earned-income tax credit (EITC) for low- and moderateincome workers. For 2017, the credit was worth as much as $6,318, the IRS points out.
“Even though the May 17 deadline is still a month off, that’s not much time when you’re looking at making sure you have the old records you need,” IRS spokesman Eric Smith said.
If 2017 W-2s or other documents are missing, contact employers, banks or other businesses now. “If subsequent back-year returns, that is, 2018 and 2019 returns, are also unfiled, be sure to file them soon as well,” Smith said. “The 2017 refund will be delayed if there are missing returns for those subsequent years. Electronic filing is not available for these back-year returns. Be sure to mail each return to the IRS in a separate envelope.”
And what happens, you may wonder, to the money, if people miss the deadline? It goes to the Treasury Department.
Here are some additional tax issues you should be aware of as the filing deadline approaches.
Estimated taxes. The IRS has not extended the deadline to pay estimated taxes. That due date for the first quarter of 2021 is still April 15. However, gig workers or the self-employed, who are not incorporated, still have until May 17 to file and pay for 2020.
Coronavirus relief and the premium tax credit for health insurance. If you use a premium tax credit to help pay for health coverage, you should know that the IRS has suspended the requirement to repay excess advance payments for 2020.
The premium tax credit is a refundable credit designed to help eligible individuals and families with low or moderate income afford health insurance purchased through the Affordable Care Act health insurance marketplace, also known as the exchange.