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IRS unclaimed refunds of $1.5 billion waiting for tax year 2016; taxpayers face July 15 deadline

Unclaimed income tax refunds worth more than $1.5 billion await an estimated 1.4 million individual taxpayers who did not file a 2016 federal income tax return, according to the Internal Revenue Service.

“The IRS wants to help taxpayers who are owed refunds but haven’t filed their 2016 tax returns yet,” said IRS Commissioner Chuck Rettig. “Time is quickly running out for these taxpayers. There’s only a three-year window to claim these refunds, and the window closes on July 15. To claim the refund, a return for tax year 2016 must be filed by July 15, 2020.”

In Notice 2020-23, the IRS extended the due date for filing tax year 2016 returns and claiming refunds for that year to July 15, 2020, as a result of the COVID-19 pandemic. As the IRS is issuing Economic Impact Payments to Americans, the agency urges taxpayers who haven’t filed past due tax returns to file now to claim these valuable refunds.

To collect refunds for tax year 2016, taxpayers must file their 2016 tax returns with the IRS no later than this year’s extended tax due date of July 15, 2020.

The IRS estimates the midpoint for the potential refunds for 2016 to be $861 — that is, half of the refunds are more than $861 and half are less.

In cases where a federal income tax return was not filed, the law provides most taxpayers with a three-year window of opportunity to claim a tax refund. If they do not file a tax return within three years, the money becomes the property of the U.S. Treasury.

For 2016 tax returns, the window closes July 15, 2020, for most taxpayers. The law requires taxpayers to properly address, mail and ensure the tax return is postmarked by the July 15 date.

The IRS reminds taxpayers that there is no penalty for filing late when a refund is involved. Taxpayers seeking a 2016 tax refund should know that their checks may be held if they have not filed tax returns for 2017 and 2018. In addition, the refund will be applied to any amounts owed to the IRS or a state tax agency and may be used to offset unpaid child support or past due federal debts, such as student loans.

By failing to file a tax return, people stand to lose more than just their refund of taxes withheld or paid during 2016. Many low- and moderate-income workers may be eligible for the Earned Income Tax Credit (EITC). For 2016, the credit was worth as much as $6,269.

The EITC helps individuals and families whose incomes are below certain thresholds. The thresholds for 2016 were:

  • $47,955 ($53,505 if married filing jointly) for those with three or more qualifying children;
  • $44,648 ($50,198 if married filing jointly) for people with two qualifying children;
  • $39,296 ($44,846 if married filing jointly) for those with one qualifying child, and;
  • $14,880 ($20,430 if married filing jointly) for people without qualifying children.

Current and prior year tax forms (such as the tax year 2016 Form 1040, 1040A and 1040EZ) and instructions are available on the IRS.gov Forms and Publications page or by calling toll-free 800-TAX-FORM (800-829-3676).

Taxpayers who are missing Forms W-2, 1098, 1099 or 5498 for the years 2016, 2017 or 2018 should request copies from their employer, bank or other payer. Taxpayers who are unable to get missing forms from their employer or other payer can order a free wage and income transcript at IRS.gov using the Get Transcript Online tool. Alternatively, they can mail Form 4506-T to request a wage and income transcript. A wage and income transcript shows data from information returns received by the IRS, such as Forms W-2, 1099, 1098, Form 5498 and IRA contribution information. Taxpayers can use the information from the transcript to file their tax return.

State-by-state estimates of individuals who may be due 2016 income tax refunds 

State or Estimated Median Total
District Number of Potential Potential
Individuals Refund Refunds
Alabama 23,300 $859 $24,614,400
Alaska 5,500 $979 $6,754,900
Arizona 32,400 $762 $32,281,600
Arkansas 13,400 $822 $13,798,800
California 130,600 $816 $135,981,300
Colorado 27,500 $809 $28,276,500
Connecticut 14,300 $930 $16,213,300
Delaware 5,600 $878 $6,114,500
District of Columbia 3,700 $904 $4,224,600
Florida 99,000 $874 $105,706,400
Georgia 48,600 $792 $49,682,700
Hawaii 7,700 $932 $8,785,600
Idaho 6,200 $727 $5,876,000
Illinois 51,700 $909 $57,312,200
Indiana 32,700 $887 $35,129,700
Iowa 14,700 $908 $15,735,600
Kansas 14,600 $877 $15,706,800
Kentucky 18,700 $869 $19,517,100
Louisiana 24,400 $849 $26,410,100
Maine 5,600 $802 $5,482,200
Maryland 28,200 $873 $31,619,700
Massachusetts 29,900 $956 $34,261,900
Michigan 46,600 $853 $49,591,400
Minnesota 21,000 $803 $21,155,300
Mississippi 12,900 $777 $12,931,600
Missouri 32,400 $828 $33,522,400
Montana 4,600 $781 $4,582,000
Nebraska 7,800 $845 $8,081,700
Nevada 15,900 $859 $16,922,300
New Hampshire 6,500 $965 $7,474,300
New Jersey 36,200 $936 $41,268,900
New Mexico 9,600 $833 $10,219,600
New York 70,300 $958 $80,830,100
North Carolina 44,900 $833 $46,044,500
North Dakota 4,000 $949 $4,539,800
Ohio 52,900 $841 $54,542,900
Oklahoma 21,000 $866 $22,600,000
Oregon 21,400 $762 $21,237,200
Pennsylvania 55,200 $919 $60,505,200
Rhode Island 3,900 $926 $4,410,100
South Carolina 17,200 $769 $17,323,700
South Dakota 3,800 $899 $3,976,100
Tennessee 29,000 $840 $29,834,800
Texas 143,400 $898 $159,809,900
Utah 11,100 $766 $11,037,700
Vermont 2,800 $892 $2,897,400
Virginia 37,900 $827 $39,977,600
Washington 37,200 $918 $42,273,300
West Virginia 7,200 $921 $7,830,000
Wisconsin 19,900 $781 $19,483,100
Wyoming 3,400 $920 $3,766,100
Total 1,418,300 $861 $1,518,154,900

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