Help clients claim $1.2 billion in unclaimed refunds

The IRS reports that more than 1.3 million taxpayers have unclaimed refunds totaling about $1.2 billion for tax year 2022, and the deadline to claim them is fast approaching.

After April 15, 2026, the three-year statute of limitations expires, meaning any unclaimed refunds become property of the U.S. Treasury. For tax professionals, this represents both a compliance issue and a client service opportunity.

Who may be missing out

These unclaimed refunds generally belong to individuals who did not file a 2022 Form 1040, U.S. Individual Income Tax Return. Many of these taxpayers may not even realize they are owed money, especially if they had taxes withheld from wages or made estimated payments during the year.

The IRS estimates the median refund is $686, with many taxpayers entitled to even larger amounts. Importantly, this estimate does not include additional credits that may significantly increase the refund.

Credits can make a big difference

Unfiled returns may also mean missed opportunities for valuable credits. The IRS highlights the earned income tax credit (EIC), which could substantially increase refunds for eligible low- and moderate-income taxpayers. Clients who assume they are not required to file may still qualify for credits that generate a meaningful refund.

2022 EIC tables 

The EIC helps individuals and families whose incomes are below certain thresholds. The credit amounts vary based on filing status and on the number of qualifying children in the household. For 2022, the EIC thresholds were:

• $53,057 ($59,187 if married filing jointly) with three or more qualifying children
• $49,399 ($55,529 if married filing jointly) with two qualifying children
• $43,492 ($49,662 if married filing jointly) with one qualifying child
• $16,480 ($22,610 if married filing jointly) without qualifying children

What tax pros can review

Now is the time to identify clients who may have skipped filing in 2022. This often includes:

• Students or part-time workers
• Retirees with limited income
• Individuals who believed their income was too low to require filing

Even if income falls below filing thresholds, withholding and refundable credits can still produce a refund. Taxpayers must file a return to claim the refund, even if no tax is owed. Remind your clients that filing a late return solely to claim a refund does not result in a penalty when no balance is due.

Practical steps to move forward

There are no extensions or appeals available to recover these funds once the deadline passes.

Clients who are missing documentation still have options. The IRS provides access to prior-year forms and encourages taxpayers to gather wage and income information to complete their returns. With the April deadline approaching, delays in gathering information or preparing returns could result in permanently lost refunds. Identifying unfiled returns and educating clients on refund eligibility can lead to meaningful financial outcomes.