Are There Unclaimed Tax Refund Dollars With Your Name On It?
Here are a few ways that could happen:
- Your employer over-withholds on your behalf - Though most employees assume that their employer withholds the correct amount of taxes on their behalf, this is not always the case.
- Earned Income Tax Credit (EITC) – THE EITC can be difficult to understand, but it is a credit specifically established for the benefit of taxpayers who earn less than a certain amount. In 2014 that amount was $52,427. Those who qualify can receive a credit as high as $6,143 payable as a refund.
- Child Tax Credit – Taxpayers that have one or more children under the age of 17 are entitled to file for the Child Tax Credit, a nonrefundable credit that reduces the amount of taxes owed. If you are low to moderate income and the credit exceeds the amount of tax that you owe, a portion may be refundable up to $1,000 per child.
- American Opportunity Tax Credit (AOTC) – For those who have family members pursuing post-secondary education, the AOTC can provide a credit of up to $2,500 per eligible student. In order to qualify the student must be enrolled at least half time for at least one academic period during the tax year. The AOTC credit is partially refundable, so even those who do not owe taxes may be able to get up to forty percent of it back.
- Premium Tax Credit (PTC) – Many of those who purchased their health insurance through the government marketplace last year were entitled to a subsidy in their premium. This subsidy is known as the premium tax credit, and if you received it ahead of time you are required to file a tax return in order to make sure that the credit was in the correct amount. If the subsidy that you received was not as high as it should have been then you may be owed money.
All of the examples cited above are common examples of how an individual may be owed an income tax refund. However, the only way that a taxpayer can be reimbursed for having paid too much to the government is if they file an income tax return. If you believe that there is a possibility that you are owed some of the $1 billion in unclaimed tax refund, you have three years to file a tax return from a previous year. The deadline to file a claim for 2012 is April 15, 2016 – otherwise the possibility of getting the money that you may be entitled to will be lost.