The Internal Revenue Service has issued a final reminder to taxpayers who may have missed out on thousands of dollars in tax refunds.
The May 17 deadline to claim refunds for the 2020 tax year is fast approaching. The IRS has said that more than an estimated $1 billion is up for grabs for the almost 1 million people who have not yet filed their tax returns.
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The IRS has also said many low- and moderate-income workers may be eligible for the Earned Income Tax Credit for 2020, which is worth as much as $6,660 for taxpayers with qualifying children. There are also outstanding claims to be made for the COVID-era Recovery Rebate Credit, which is available to those who did not receive one or more Economic Impact Payments, commonly known as stimulus payments or checks, which were distributed in 2020 and 2021.
"There's money remaining on the table for hundreds of thousands of people who haven't filed 2020 tax returns," said Danny Werfel, the commissioner of the IRS. "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."
The deadline for any outstanding returns where a refund may be claimed usually falls in line with the annual April tax deadline, which fell on April 15. However, the outstanding-returns deadline was postponed to May 17 because of the coronavirus pandemic.
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In its final reminder, the IRS advised anyone who believes they may be owed to gather all the required documents, which the government agency can help with. Options for taxpayers include these:
- Request copies of key documents. Taxpayers who are missing Forms W-2, 1098, 1099 or 5498 for the relevant year can request copies from their employer, bank or other payers.
- Request a transcript using an online tool. Taxpayers who have lost contact with their employer or other payers can order a free wage and income transcript at IRS.gov using the Get Transcript Online tool. The IRS says that for many taxpayers, this is "by far the quickest and easiest option."
- Request a transcript using a form. Another option is to file Form 4506-T, Request for Transcript of Tax Return, with the IRS to request a wage and income transcript.
Any money that is not claimed goes to the U.S. Treasury and cannot be recovered after the filing deadline. The IRS has also reassured taxpayers that there is no penalty for claiming a refund on a late-filed tax return.
Werfel said in a previous reminder that the lack of claims was likely due to the coronavirus pandemic. "People faced extremely unusual situations during the pandemic, which may have led some people to forget about a potential refund on their 2020 tax returns," he said.
The commissioner also said many "may have just overlooked these, including students, part-time workers and others," while some taxpayers may not realize they are owed money. "We encourage people to review their files and start gathering records now, so they don't run the risk of missing the May deadline."
Uncommon Knowledge
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Newsweek is committed to challenging conventional wisdom and finding connections in the search for common ground.
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Aliss Higham is a Newsweek reporter based in Glasgow, Scotland. Her focus is reporting on issues across the U.S., including ... Read more
