1,000 million hopes for 1.1 million taxpayers. Confused? Well, it was a poetic attempt to begin discussing how the Internal Revenue Service (IRS) reported that $1,025,336,800 in tax refunds for 2021 remain unclaimed.
More than 1.1 million people could recover an average of $781 to $897.75. The filing deadline is April 15, 2025, after which the funds will become the property of the United States Treasury.
Who can claim these tax refunds? Almost any taxpayer
The recipients are taxpayers who did not file Form 1040 for 2021 but overpaid taxes or are eligible for refundable credits, such as the Earned Income Tax Credit (EITC).
The latter can be worth up to $6,728 for eligible individuals with dependent children. According to IRS studies, many people are unaware of their rights, particularly low-income workers, students, and temporary employees.
Lack of information and geographic mobility are two factors that have prevented millions of Americans from receiving refunds. People who have changed addresses without notifying the IRS may not receive notices.
Furthermore, there is a common misconception that having a low income excuses you from filing a tax return. However, the IRS emphasizes that even those who earn less than the required minimum must do so in order to receive credits such as the EITC.
Average and median: two sides of tax refunds
While the average refund is approximately $897.75, the median of $781 indicates an uneven distribution. This discrepancy implies that some amounts are significantly higher, possibly due to additional credits.
For example, the median in New York is $995, compared to $600 in California, reflecting income disparities and state policies. However, there is a distinction between “average” and “median” when it comes to tax refunds.
Average:
The average, or arithmetic mean, is calculated by adding all the values in a set of data and dividing the result by the total number of values. It is a measure that considers each individual value and can therefore be influenced by extreme or outlier values.
Median:
The median is the value found in the center of a set of data when the data is ordered from smallest to largest. Unlike the average, the median is not affected by extreme values, since it only considers the midpoint of the distribution. This makes it a more robust measure in situations where the data is not uniformly distributed.
Claim your refund TODAY, or say goodbye forever
The IRS released state tables that show eligible individuals and estimated amounts. This data excludes credits like the Recovery Rebate Credit, which would boost totals if claimed.
Organizations such as Volunteer Income Tax Assistance (VITA) provide free assistance to make the process easier, particularly in underserved communities.
If the funds are not recovered by 2025, the federal Treasury will absorb them. Experts warn that this would harm vulnerable households, as the EITC reduces poverty by 5 million children each year, according to the Congressional Budget Office.
The IRS encourages you to check your eligibility using online tools like Should I File? on its official website.
Taxpayers must fill out the 2021 Form 1040, which is available on the IRS website, and attach supporting documents such as W-2, 1098, or 1099.
Those who do not have them can obtain them from their employers or use the Get Income Transcript tool. Late declarations do not result in fines if the balance is in favor, but delays may complicate collection.
