Taxpayers With Unclaimed 2021 Refunds Face April 15 Filing Deadline: IRS

California and Texas have the highest number of people potentially entitled to such tax refunds.

The Internal Revenue Service (IRS) in Washington on March 10, 2025. Madalina Vasiliu/The Epoch Times

Taxpayers who failed to submit their 2021 tax year returns may still be eligible for refunds if they file soon enough, according to the U.S. Internal Revenue Service (IRS).

“Over 1.1 million people across the nation have unclaimed refunds for tax year 2021 but face an April 15 deadline to submit their tax returns,” the agency said in a March 11 statement.

The total value of these unclaimed refunds is calculated to be more than $1 billion.

“The IRS estimates the median refund amount is $781 for 2021. That means half of the refunds are more than $781 and half are less. This estimate does not include the Recovery Rebate Credit or other credits that may be applicable,” the IRS said.

“Under the law, taxpayers usually have three years to file and claim their tax refunds. If they don’t file within three years, the money becomes the property of the U.S. Treasury.”

With 116,300 people, California has the highest number of estimated individuals who are potentially eligible for refunds on their 2021 returns, followed by 102,200 Texans. New York, Florida, Pennsylvania, Illinois, and Michigan are other states with a considerable number of potentially eligible individuals.

The IRS clarified that people seeking refunds for 2021 who did not file returns for 2022 and 2023 could have these amounts withheld by the agency.

If a person owes the IRS or a state tax agency, then the refund amount for 2021 may be used to offset such dues. Such offsets could also be carried out in case taxpayers have unpaid child support or past due federal student loans.

“By missing out on filing a tax return, people stand to lose more than just their refund of taxes withheld or paid during 2021,” the agency said. “Many low- and moderate-income workers may be eligible for the Earned Income Tax Credit (EITC). For 2021, the EITC was worth as much as $6,728 for taxpayers with qualifying children.”

After filing 2021 returns, people can check their refund status using the “Where’s My Refund” tool.

It displays one of the three statuses: Return Received, Refund Approved, or Refund Sent.

“Taxpayers don’t need to check their refund status more than once a day. The IRS updates Where’s My Refund overnight in most cases,” the agency said.

Refunds, IRS Notices

Once a return is filed, the IRS typically takes up to 21 days to process the taxpayer’s refund in case of e-filing. For mail, processing usually takes up to four weeks or more. Returns requiring corrections or extra review take longer.

In case the taxpayer has filed an amended return, the time required to process refunds may stretch up to 16 weeks.

“If you e-file your return, you can usually see your refund status after about 48 hours with Where’s My Refund? You can get your refund information for the current year and past 2 years,” the agency said.

For the most recent tax year 2024 return, the IRS has taken steps to reduce refund delays.

From the 2025 filing season, taxpayers who opt to e-file shall be able to submit returns claiming dependents, even if those dependents have already been claimed on another return. This is acceptable as long as the individual includes a valid Identity Protection Personal Identification Number in their return.

“This change will reduce the time for the agency to receive the tax return and accelerate the issuance of tax refunds for those with duplicate dependent returns,” the IRS said.

A group of lawmakers recently reintroduced the Internal Revenue Service Math and Taxpayer Help (IRS MATH) Act to improve IRS error notices.

Every year, the IRS sends these notices to millions of taxpayers when their returns have simple math or clerical errors. These notices tend to be vague and confusing for many people, often failing to specify the exact reason why their refunds were being reduced. The proposed legislation seeks to resolve this issue.

“If the IRS finds a mistake on a tax return, this agency should be required to clearly communicate that error to the taxpayer and explain why a tax refund is higher or lower than expected,” said Rep. Randy Feenstra (R-Iowa), who introduced the bill.

“That’s why I’m glad to introduce legislation to ensure that the IRS clearly spells out errors on tax forms and helps taxpayers not only understand the mistake but also challenge it if they see fit.”