The Internal Revenue Service (IRS) is urging approximately 1.1 million Americans to claim their unclaimed tax refunds before the deadline expires. An estimated $1 billion in refunds from the 2021 tax year remains uncollected due to individuals failing to file their Form 1040 Federal Income Tax returns. With a median refund of $781, taxpayers are at risk of losing this money permanently if they do not act promptly. Under federal regulations, individuals have a three-year window to file and reclaim their refunds; otherwise, the funds revert to the U.S. Treasury.

In Alabama alone, over 18,000 residents are entitled to an average refund of $743. The IRS has set April 15 as the final date for submitting returns. Beyond just missing out on refunds, those who fail to file might also forfeit eligibility for additional credits like the Earned Income Tax Credit (EITC). This credit offers substantial financial benefits, particularly for low and moderate-income workers with qualifying dependents.

For the 2021 tax year, the EITC thresholds were established based on income levels and family size. Individuals with three or more qualifying children could receive up to $6,728 if their income was below $51,464 (or $57,414 for married couples filing jointly). Similarly, thresholds existed for families with two, one, or no qualifying children. These amounts reflect the significant support available to eligible taxpayers.

However, not all refunds will reach recipients immediately. Certain conditions may delay disbursement. For instance, if someone has outstanding filings for subsequent years (2022 or 2023), their refund could be withheld until those returns are submitted. Additionally, any owed debts—such as unpaid child support, overdue federal loans, or state taxes—may result in the refund being applied toward these obligations instead of being returned to the taxpayer.

Taxpayers seeking to file their 2021 returns can access most required documentation online. By visiting designated IRS resources, individuals can obtain guidance and complete the necessary steps to secure their rightful refunds before the looming deadline.

As the deadline approaches, it is crucial for eligible taxpayers to take action swiftly. Failing to do so risks losing both potential refunds and associated credits. Understanding the implications and requirements can empower individuals to maximize their financial opportunities through timely submission of their tax returns.