The IRS has warned nearly 940,000 tax refunds of approximately $1 billion from 2020 could expire soon. The majority of these unclaimed refunds–average of $932 per individual– are mainly from states of Texas, California, Florida, and New York. If not claimed, the IRS may use these funds to cover existing tax obligations. Therefore, taxpayers are urged to file their 2020 returns soon to avoid losing what is rightfully theirs.
On March 25, 2024, IRS Commissioner Danny Werfel announced the deadline for claiming these refunds is May 17. He stressed that after this date, unused funds will become the property of the US Treasury. The IRS is assisting taxpayers with online tools and extended customer service hours to help them file their returns before this deadline.
Taxpayers unsure about filing their returns can use IRS tools to retrieve necessary form data. These forms can be downloaded from the ‘Get Transcript Online’ feature on the IRS website. The IRS offers free tax services for low to moderate-income individuals through the VITA and the TCE programs. Also, the IRS doesn’t charge for late filing if a refund is due.
The IRS provides a three-year window to claim refunds.
Claim your unclaimed tax refunds soon
For the 2020 refunds, the deadline was extended from April 15 to May 17 due to COVID-19. Those who’ve asked for an extension have until October 15, and some might qualify for further extensions. It’s crucial to note that the IRS will hold 2020 refunds for taxpayers who haven’t filed 2021 and 2022 returns until these documents are submitted. Also, overdue tax returns of over three years could lead to lost refunds due to expired claim limitation.
The 2023 tax season started on January 29, with IRS receiving over 71.5 million individual tax filings. This year more taxpayers filed electronically. So far, over 67 million refunds were issued, averaging $3,000 each. Many taxpayers also benefitted from the tax provisions of the American Rescue Plan Act of 2021. The IRS recommends electronic filing and direct deposit for quicker and safer tax refund process.
With the upcoming 2024 tax season, the IRS advises taxpayers to start preparing early. The agency urges individuals to keep income documents ready, understand tax code changes, and seek professional help if needed to avoid common filing errors.
