The IRS recently sent out a final reminder for those who still need to claim their portion of the $1 billion in tax refunds from 2020. Time to file for a refund expires May 17, 2024. There are approximately 1 million people who didn’t file their tax returns for tax year 2020 and may be eligible for a refund if they file by the May 17 deadline. There is an estimate of more than $1 billion in refunds that remain unclaimed because people haven’t filed their 2020 tax returns yet. There’s no penalty for failure to file if a refund is due. However, filing a return and claiming a refund must be filed within three years of its due date for a refund to be allowed. After the expiration of the three-year period, the refund statute generally prevents the issuance of a refund check and the application of any credits, including overpayments of estimated taxes or withholding amounts, to other tax years that are underpaid.
For 2020 tax returns, people have a little more time than usual to file their claim for refunds. Typically, the filing deadline to claim old refunds falls around the tax deadline of April 15. However, the 2020 filing deadline was pushed to May 17, due to COVID-19, making the three-year window deadline for 2020 unfiled returns May 17, 2024.
By missing out on filing a tax return, people stand to lose more than just their refund of taxes withheld or paid during 2020. The estimate does not include credits that non-filers may be eligible to receive. Credits include the Earned Income Tax Credit, the Recovery Rebate Credit or other credits that may be applicable.
Many low- and moderate-income workers may be eligible for the Earned Income Tax Credit (EITC). For 2020, the EITC was worth as much as $6,660 for taxpayers with qualifying children. The EITC helps individuals and families whose incomes are below certain thresholds.
Remember, those who may be entitled to the COVID-era Recovery Rebate Credit in 2020, time is running out to file a tax return and claim your money. The Recovery Rebate Credit is a refundable credit for individuals who did not receive one or more Economic Impact Payments, also known as stimulus payments, distributed in 2020 and 2021.
Gathering all the necessary documents and forms to file a return for 2020 may take some time. People should start as soon as possible to make sure they have enough time to file before the May 17 deadline for 2020 refunds.
The IRS also reassures taxpayers there is no penalty for claiming a refund on a late-filed tax return. Direct deposit is recommended as the quickest and simplest way to receive a tax refund.
Contact Angie Love’s Taxes to set up an appointment to get the refund you deserve!