Get your piece of a $32 billion pie
Grab your unclaimed tax refunds by April 15. Plus, other places to find cash.
Lose track of $100 or more? You? Even if you carefully balance every penny in your checking account, it’s a definite possibility.
The states are collectively holding on to more than $32.8 billion in unclaimed assets in the form of dormant bank accounts, stock splits, life insurance payouts, gift cards, uncashed payroll checks and other funds, reports the National Association of Unclaimed Property Administrators. In all but two states, there’s no time limit to declare ownership. (Idaho allows 10 years to make a claim; Indiana, 25.)
- Video: How to claim unclaimed cash
But if you’re owed a federal tax refund, better get a move on. The IRS is holding an additional $1.3 billion in unclaimed 2006 tax refunds that eligible taxpayers have only until April 15 -- a little less than three weeks -- to claim. That's the same amount of unpaid 2005 refunds that expired last year, but down 41% from the $2.2 billion held in 2003 refunds -- meaning taxpayers are getting more proactive about claiming what’s theirs.
This year, 1.4 million individuals could be affected, with an average refund due of $800. “These are people who did not file a return for whatever reason, but if they had, would qualify for a refund,” says agency spokesman Eric Smith. It really is free money: There are no penalty fees for filing your return years late if Uncle Sam owes you, and not the other way around.
Most unclaimed funds get lost in the first place due to simple error, like moving without forwarding your mail or neglecting to cash a check, says John Gabriel, the president of NAUPA and Tennessee’s unclaimed-property director. Other assets stem from deceased people with no known heirs. The states make an effort to find the money’s owners, but ultimately it’s up to you to file a claim. Until you do, the state gets to use the funds as non-tax revenue.
Here’s how to claim what’s yours:
Federal tax refunds. To collect those soon-expiring 2006 refunds, you must file a paper tax return for that year, Smith says. You can call the IRS to request copies of W-2's and 1099's for that year, if your records are incomplete. Retrieving the records can take several weeks, so act fast, he says. At the very least, most consumers are eligible for $30 to $60 from the repealed Telephone Excise Tax Refund, based on exemptions claimed.
Even taxpayers who have consistently filed a return may be owed money if a previous refund check wasn’t cashed or got lost in the mail. Use the IRS “Where’s My Refund?” tool to check the status. You’ll need to provide your Social Security number or taxpayer ID, as well as filing status and the exact dollar amount of the refund. The good news: There’s no time limit to claim these funds.
Everything else. Any assets you have owned but haven’t claimed in at least three years -- including but not limited to paychecks, insurance payouts, cashier’s checks, utility deposits, bank account funds, investments and gift cards -- end up at the state’s treasurer’s office. Conduct a free search using NAUPA’s MissingMoney.com, which pulls from most states’ databases. Then check the databases for each state where you have lived or conducted business, Gabriel says. Steer clear of online databases that, for a fee, allow you to search for unclaimed assets. It’s the same information the free state sites have.
To successfully claim the assets, you need evidence linking you to the money. That could simply be a photo ID, or for something like a utility deposit, a bill from your old address, he says. If you’re successful, the state may charge a processing fee of up to 2%.
Inheritance. It’s rare, but you may have inherited unclaimed funds. Proving ownership, however, is tricky business, Gabriel says. You’ll need to prove the deceased individual’s right to the money and then your right of inheritance. If there are multiple possible heirs, the money will be divided among them.
Be cautious with so-called finder companies that may approach you claiming to have discovered an inherited asset you’re entitled to -- which they’ll help you claim in exchange for a fee, he says. You can decline and try to locate it yourself through the state databases. But if you do choose to work with the company, check state guidelines on finder’s fees. Most impose a maximum of about 10% of the claimed asset.
Related reading at SmartMoney:
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