IRS Alert: 940,000 Unclaimed Tax Refunds From 2020 Set To Expire Soon
The Internal Revenue Service (IRS) announced that almost 940,000 people across the nation have unclaimed refunds for the tax year 2020 but face a May 17 deadline to submit their tax returns. According to the organization, they estimated over $1 billion in refunds that remain unclaimed because people haven’t filed their 2020 tax returns yet.
“There’s money remaining on the table for hundreds of thousands of people who haven’t filed 2020 tax returns,” said IRS Commissioner Danny Werfel. “We want taxpayers to claim these refunds, but time is running out for people who may have overlooked or forgotten about these refunds. There’s a May 17 deadline to file these returns so taxpayers should start soon to make sure they don’t miss out.”
They said that the average median refund is $932 for 2020. “This estimate does not include the Recovery Rebate Credit or other credits that may be applicable; the IRS has previously reminded those who may be entitled to the COVID-era Recovery Rebate Credit in 2020 that time is running out to file a tax return and claim their money,” they stated. Their data shows that Texas (93,400), California (88,200), Florida (53,200), and New York (51,400) have the biggest amount of people potentially eligible for these refunds.
IRS Unclaimed Tax Refunds
Taxpayers usually have three years to file and claim their tax refunds. If they don’t file within three years, the money becomes the property of the U.S. Treasury. For 2020 tax returns, people have a little more time than usual to file to claim their refunds. Typically, the normal filing deadline to claim old refunds falls around the April tax deadline, which is April 15 this year for 2023 tax returns. However, the three-year window for 2020 unfiled returns was postponed to May 17, 2024, due to the COVID-19 pandemic emergency.
In Feb. 2023, the organization issued Notice 2023-21, providing legal guidance on claims required by the postponed deadline.
If you still need to file a return, the IRS recommends taxpayers to request their W-2, 1098, 1099, or 5498 from their employer or bank or order a free wage and income transcript using the “Get Transcript Online,” tool at IRS.gov.
The IRS reminds taxpayers seeking a 2020 tax refund that their funds may be held if they have not filed tax returns for 2021 and 2022. In addition, any refund amount for 2020 will be applied to amounts still owed to the IRS or a state tax agency and “may be used to offset unpaid child support or other past due federal debts, such as student loans.”
Take a look at state-by-state estimates of people who may be due 2020 income tax refunds and more information here.
