How to Claim Unclaimed Refunds From the IRS or State

February 19, 2020 | By: Kari Brummond

unclaimed tax refund moneyThe Internal Revenue Service (IRS) is holding over $1 billion in unclaimed income tax refunds from 2015 alone and similar amounts from other years. In some cases, the money was returned to the IRS due to closed bank accounts or wrong addresses. In other cases, refunds sit waiting because taxpayers didn’t file a tax return to claim their refunds.

Want to know how to find an unclaimed refund? Wondering if you may have earned a refund during a year you didn’t file? Here’s what you need to know.

Undelivered Refunds

If you filed a tax return and earned a refund but never received it, you have an undelivered refund. Again, this usually happens if you move, and the IRS doesn’t have your new address or if you requested a direct deposit and closed your bank account.

To find your money, check out the IRS’s online “Where’s My Refund?” tool. To access the system, you need your Social Security Number, filing status (individual, married filing jointly, married filing separately, etc.), and the exact refund amount. You can find your refund amount on your old tax return. If you used tax return software, you should be able to sign in and find a copy of your old return, and of course, if you worked with an accountant, they can also help you figure out the right amount.

Once you sign into the system, update your address and request to have the refund check mailed to you. If you have old unpaid taxes, keep in mind that the IRS applies your refund to your tax bill, so you won’t be able to get the money. If you want help with the process, you may want to contact a tax professional.

Refunds Sent to Wrong Bank Accounts

Unfortunately, if you didn’t enter the right account details, the IRS may have sent your refund to someone else’s bank account. In this situation, you may look at the Where’s My Refund tool and discover that the IRS believes you have already received your money. In this situation, you should contact the bank that received the money.

If you put in the right routing number but the wrong account number, the refund got sent to another account at your bank. Search online to see which bank uses that routing number if you used the wrong routing number — these numbers are public information.

If the bank refuses to help you, file Form 3911 (Taxpayer Statement Regarding Refund) with the IRS. Then, the IRS will contact the bank on your behalf. Unfortunately, banks have up to 90 days to respond to the inquiry, and the banks aren’t compelled to return the funds. If the bank refuses to work with the IRS, you may have to initiate a civil case to attempt to recoup the funds from the bank or the account holder.

Unclaimed Refunds

If you didn’t file a return, but you think you may have a refund, you can claim the refund by filing that year’s tax return. Luckily, when the IRS owes you money, you don’t have to pay any interest or fees on a late return, but if you wait for more than three years, you forfeit your refund. You have to file within three years of the original due date.

For instance, if you want to claim a refund for the tax year 2015, the return was originally due on April 15, 2016, so you had until April 15, 2019, meaning you can no longer claim refunds for that tax year. Now, you have until April 15, 2020, to claim refunds for the tax year 2016.

You may have a refund if you didn’t earn enough money to be legally obligated to file a tax return, but your employer withheld income taxes from your wages. Check your W2 forms from that year to see if you might qualify. Similarly, if you had earned income and made under the threshold to receive the Earned Income Tax Credit (EITC), you may also have an unclaimed refund. As of the tax year 2018, individuals can claim this credit if they have under $15,270 in income, while couples filing jointly with three or more qualifying children can receive the credit if they have up to $54,884 in adjusted gross income.

Unclaimed State Refunds

Think you might have an unclaimed tax refund from your state? Then, you should contact your state’s revenue department to obtain the missing funds. The IRS has a list of links to state revenue departments here. When dealing with state refunds, you also usually have three years to file your return. To get the ball rolling, you need to file a state tax return for the year in question — don’t use the current year’s form as the details change from year to year.

You can also look for money from other unclaimed sources on the website of the National Association of Unclaimed Property Administrators. This database has all kinds of unclaimed money — for instance, if you abandoned a bank account or if a company owed you a refund but couldn’t get ahold of you, you can find those funds through this website. Simply select your state, search for your name, and follow the instructions if you find any unclaimed funds.

Don’t let the IRS, the state government, or any other entity keep your money. If you have unclaimed money, use the tips above to find your funds. Then, use the money to pay down tax liabilities or treat yourself to something fun.