Over 11,700 residents in Connecticut are unaware of unclaimed tax refunds from the 2021 fiscal year, potentially totaling $11 million. Nationwide, more than 1.1 million individuals have not claimed their refunds, with over $1 billion remaining uncollected for those who failed to file Form 1040. Low-income and moderate-income workers may be eligible for the Earned Income Tax Credit (EITC), which could significantly boost their refund amounts. However, if these funds remain unclaimed by April 15, they will revert to the U.S. Treasury.

Understanding the Earned Income Tax Credit and Its Benefits

The Earned Income Tax Credit (EITC) offers substantial financial support to working individuals and families with incomes below specific thresholds. For the 2021 tax year, this credit ranged up to approximately $6,728, depending on the individual's income level. The EITC is designed to assist those whose earnings fall within designated limits, providing them with a significant tax benefit.

To qualify for the EITC in 2021, income thresholds varied based on family composition. For instance, families with three or more qualifying children could earn up to $51,464 ($57,414 for married couples filing jointly). Couples with two children were eligible if their income did not exceed $47,915 ($53,865 for joint filers). Families with one child qualified if their income was below $42,158 ($48,108 for married couples). Individuals without qualifying children could still claim the credit if their income was under $21,430 ($27,380 for married couples).

Consequences of Not Claiming Your Refund

If you are among the many who have yet to claim your 2021 tax refund, it's crucial to act soon. Unfiled returns can lead to missed opportunities for receiving owed money. Moreover, any outstanding debts to the IRS will be deducted from your refund before you receive the remaining balance. Failing to file tax returns for subsequent years can also result in the withholding of your 2021 refund.

By law, if the refunds remain unclaimed by April 15, the funds will become property of the U.S. Treasury. This deadline serves as a critical reminder for taxpayers to review their eligibility and take necessary actions to claim what they are owed. It's essential to gather all required documentation and file the necessary forms promptly to avoid losing out on potential financial benefits.