$1 Billion in Unclaimed Tax Refunds Is About To Vanish (Is Any of It Yours?)

The IRS is holding more than $1 billion in unclaimed tax refunds, and time is running out for taxpayers to collect what they're owed.

If you didn't file a 2021 tax return, you might still be eligible to claim a refund that could help your paycheck stretch a bit further. But once the deadline passes, the money goes to the government and not your bank account.

Here's what you need to know to claim your share before it's too late.

More than 1.1 million taxpayers are owed a refund from the IRS for the 2021 tax year. Many of these individuals are lower-income workers who qualified for the earned income tax credit (EITC) but never filed a return.

The EITC could be worth as much as $6,728 for families with qualifying children. Even if you didn't earn much in 2021, you may still be owed money, especially if federal taxes were withheld from your paycheck.

To receive a refund for 2021, you must file a federal tax return for that year by April 15, 2025. The IRS allows taxpayers a three-year window to claim unfiled refunds, after which the money becomes property of the U.S. Treasury.

That means if you don't act soon, your refund will be gone for good.

The IRS estimates that unclaimed refunds for the 2021 tax year total more than $1 billion. Refund amounts vary, but the median refund is $781, meaning many taxpayers could receive significantly more.

Some families — particularly those who qualified for tax credits like the EITC — may be eligible for refunds worth thousands of dollars. Even if you think your refund is small, it's worth filing. After all, it's money that belongs to you.

As we mentioned previously, if you fail to file by April 15, 2025, your unclaimed refund will be permanently lost.

Federal law only allows a three-year window to collect unfiled tax refunds, after which the funds legally belong to the U.S. Treasury.

So, after April 15, your lost refund can no longer become money to pay bills, invest, or save for the future.

Filing a past-due tax return is simpler than you might think. One way to begin is to create an IRS individual online account.

If you worked in 2021 but didn't file, you'll also need to collect your W-2 or 1099 forms from that year.

If you're unsure how to file, the IRS's Volunteer Income Tax Assistance (VITA) program may be able to help. Or, seek out the help of a tax professional.

If you don't have your W-2 or other tax forms from 2021, you can request a free wage and income transcript from the IRS. This transcript provides a record of all income reported to the agency and can be used to complete your tax return.

Additionally, you can contact your former employer or financial institution to request copies of missing forms. The key is to start gathering documents now so you don't miss the deadline.

More than $1 billion in tax refunds from the 2021 tax year is still unclaimed, but the clock is ticking. Taking action now can be critical to the future health of your finances.

Claiming what is rightfully yours can help you collect some cash that can be used to crush your tax debt or improve your overall financial situation.