According to local tax officials, some area residents may have a rather sizable refund coming to them â€” they just aren't aware of it.
Refunds totaling more than $1 billion may be waiting for as many as 1 million people throughout the nation who did not file a federal income tax return for 2008, according to AARP Tax-Aide Coordinator Ray Alexander. However, any hope of collecting that money will vanish in April.
â€śTo collect the money, a return for 2008 must be filed with the IRS no later than Tuesday, April 17,â€ť Alexander explained. â€śThe IRS estimates that half of these potential 2008 refunds are $637 or more.
â€śSome people may not have filed because they had too little income to require filing a tax return even though they had taxes withheld from their wages or made quarterly estimated payments. In cases where a return was not filed, the law provides most taxpayers with a three-year window of opportunity for claiming a refund. If no return is filed to claim a refund within three years, the money becomes property of the U.S. Treasury.â€ť
For 2008 returns, the window closes on April 17. The law requires that the return be properly addressed, mailed and postmarked by that date. There is no penalty for filing a late return qualifying for a refund, according to Alexander.
â€śTaxpayers seeking a 2008 refund should remember their checks may be held if they have not filed tax returns for 2009 and 2010,â€ť Alexander advised. â€śIn addition, the refund will be applied to any amounts still owed to the IRS, and may be used to offset unpaid child support or past due federal debts such as student loans.
â€śBy failing to file a return, people stand to lose more than refunds of taxes withheld or paid during 2008. Some people, especially those who did not receive an economic stimulus payment in 2008, may qualify for the Recovery Rebate Credit.â€ť
In addition, Alexander said many low-and moderate-income workers may not have claimed the Earned Income Tax Credit (EITC). The EITC helps individuals and families whose incomes are below certain thresholds. The thresholds for 2008 were:
â€” $38,646 ($41,646 if married filing jointly) for those with two or more qualifying children
â€” $33,995 ($36,995 if married filing jointly) for people with one qualifying child, and
â€” $12,880 ($15,880 if married filing jointly) for those with no qualifying children.
â€śCurrent and prior year tax forms and instructions are available on the Forms and Publications page of IRS.gov or by calling toll-free 800-TAX-FORM (800-829-3676). Taxpayers who are missing Forms W-2, 1098, 1099 or 5498 for 2008, 2009 or 2010 should request copies from their employer, bank or other payer,â€ť Alexander said. â€śIf these efforts are unsuccessful, taxpayers can get a free transcript showing information from these year-end documents by ordering it on IRS.gov, filing Form 4506-T, or by calling 800-908-9946.â€ť