Rep. Maloney: Families Losing Out on Over $10 Billion in Unclaimed Tax Credits Each Year

Washington, D.C. - Taxpayers claimed nearly $83 billion in tax credits in 2004, but families missed out on over $10 billion in unclaimed tax credits, according to estimates by the Joint Economic Committee.

 "American families are leaving billions of dollars on the table each year by not claiming some very beneficial tax credits.  The IRS can help do more to close this tax credit gap," said Rep. Carolyn Maloney (D-NY), Vice Chair of the Joint Economic Committee. "These unclaimed tax credits help families pay for child care, send their children to college, save for retirement, or work their way into the middle class.  The IRS should issue a report on the characteristics of households not taking advantage of these tax credits so that we can do better outreach to families who are missing out."

In 2004, the most recent year for which data are available, taxpayers claimed nearly $83 billion in combined tax credits from the earned income, child, education, child care, and saver's credits (See table). Yet each year, millions of taxpayers do not claim the credits for which they are eligible. An analysis by the Joint Economic Committee estimates that in 2004 households lost out on over $10 billion in unclaimed tax credits for the Earned Income Tax Credit (EITC), education tax credits, and the Savers' Credit. 

A full copy of the JEC report can be found here.

It is difficult to determine the exact amount of unclaimed credits, since the IRS does not estimate how many individuals who are eligible for the various credits do not receive them. Therefore, administrative and survey data must be used to estimate how many taxpayers claim various tax credits. Relevant data is available for the EITC, education, and Savers' credits, but not for the child or child care credits.