May 17 Was the Deadline for $1 Billion in Unclaimed IRS Tax Refunds
Millions of people had unclaimed tax refunds from four years ago waiting for them at the IRS but didn't know it.
Unclaimed tax refunds totaling about $1 billion remained unclaimed at the IRS because millions of taxpayers hadn't filed tax returns for the 2020 tax year. (In other words, you might have had money waiting for you and not have known.)
“There’s money remaining on the table for hundreds of thousands of people who haven’t filed 2020 tax returns,” IRS Commissioner Danny Werfel said in a release. “We want taxpayers to claim these refunds, but time is running out for people who may have overlooked or forgotten about these refunds.”
The deadline to file these returns was Friday, May 17, 2024.
Sign up for Kiplinger’s Free E-Newsletters
Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.
Profit and prosper with the best of expert advice - straight to your e-mail.
Unclaimed IRS tax refund
- Normally, taxpayers have three years to file their federal tax return and to claim tax refunds due, if any.
- After the three years pass, the unclaimed refund money becomes U.S. Treasury Department property.
- While that is the normal rule, the three years for filing returns and claiming refunds were extended for 2020 federal tax returns because of the pandemic.
So, for 2020 returns that would typically have been filed in April 2021, the window for unfiled returns was pushed to May 17, 2024. That means that people who still haven’t filed their 2020 returns have missed the deadline to avoid losing tax refunds associated with that tax return.
Average tax refund amount
How much money are we talking about? The IRS says that the average median unclaimed refund amount for 2020 is $932. That means about half the refunds are more than that amount and about half are less.
In terms of who is probably due a refund, Commissioner Werfel said, “Students, part-time workers, and others” who may have little income sometimes do not file a tax return and never realize they may be owed a refund.
- Even though the agency has estimated the average refund, the amount you may receive (if you are due a refund and filed your 2020 tax return by the May 17 deadline) will depend on your specific tax situation.
- (Also, it’s important to keep in mind that if you owe the IRS or a state tax agency or have unpaid child support or other federal debts, you might not receive a refund.
Additionally, by not filing a tax return, the IRS notes that “people stand to lose more than just their refund of taxes withheld or paid during 2020.”
For example, many people with low and moderate incomes 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. Another tax credit that may apply for 2020 tax returns includes the Recovery Rebate Credit.
Unclaimed IRS refunds by state
The IRS published state-by-state estimates of how many people might be due refunds. That information also shows the median potential refund and the total potential refunds for each state.
- For example, in California, about 88,200 people had unclaimed IRS refunds at an estimated potential median amount of $835 each. That’s more than $94 million in unclaimed money.
- Some states with relatively high estimated potential median refund amounts are Pennsylvania at $1,031, New York at $1029, and Maryland at $991.
- In West Virginia, as another example, the IRS estimates that about 3,800 people were due refunds with the total potential refunds for the state being a little over $4 million.
For more information about the number of people due 2020 IRS refunds and the estimated amounts of money involved, visit the IRS website.
Unclaimed 2020 refund: What to do
If you thought you had an unclaimed IRS refund, you should have reviewed and gathered the records needed to file your 2020 federal income tax return by May 17, 2024. That might have seemed daunting because nearly three years have passed, but the IRS has ways you can request key documents and transcripts.
For example, if you didn't have a W-2, or other important tax forms from 2020, like a 1099 form, you could request copies from your former employer. Banks, or other payors, for certain tax forms, may be able to help as well.
If your former employers or payors cannot help you, the IRS has a Get Transcript Online tool. If you need to file your federal income tax return for 2020, the IRS has free resources like the Interactive Tax Assistant. You might also be eligible for free tax preparation help through the VITA and Tax Counseling for the Elderly programs.
There is no penalty for claiming a refund on a late-filed tax return and the IRS says direct deposit is the recommended way to receive your refund.
Related
Get Kiplinger Today newsletter — free
Profit and prosper with the best of Kiplinger's advice on investing, taxes, retirement, personal finance and much more. Delivered daily. Enter your email in the box and click Sign Me Up.
As the senior tax editor at Kiplinger.com, Kelley R. Taylor simplifies federal and state tax information, news, and developments to help empower readers. Kelley has over two decades of experience advising on and covering education, law, finance, and tax as a corporate attorney and business journalist.
-
Earnings Season: Live Updates and Commentary
Fourth-quarter earnings season is getting underway, and Wall Street is keeping a close eye on both results and guidance.
By Kiplinger Staff Last updated
-
'Pickleball Tax' Battle Heads to Court
State Tax The pickleball controversy continues as a nonprofit organization takes legal action against “illegal” taxes.
By Kate Schubel Published
-
IRS Free File Is Now Open for 2025: Are Your Taxes Eligible?
Tax Filing Official tax season doesn't begin until late January, but taxpayers can start filing free online returns now.
By Kate Schubel Last updated
-
California Fires: How to Recover Tax Records and Other Important Documents
Disaster Recovery Having your tax records and other vital documents is important for claiming casualty loss deductions that can help with recovery.
By Gabriella Cruz-Martínez Last updated
-
Child and Dependent Care Credit: How Much Is It?
CDCTC The non-refundable tax break can help working families afford quality care for their child or qualifying dependent.
By Gabriella Cruz-Martínez Last updated
-
Gov. Hochul Wants to Triple the New York Child Tax Credit
State Tax Millions of New York families could get a larger state child tax credit check over the next two years under a new proposal.
By Gabriella Cruz-Martínez Last updated
-
U.S. Consumers May Feel Pinch From Panama Canal Tariff Hike
Tax Policy The Panama Canal tariffs on crossing ships will add to looming price hikes for U.S. consumers as Trump threatens to take control of the historic waterway.
By Gabriella Cruz-Martínez Published
-
The American Opportunity Tax Credit (AOTC): How Much Is It Worth?
Tax Credits This tax break can help you offset $2,500 in qualifying expenses tied to your higher education. Here's what you need to know.
By Gabriella Cruz-Martínez Last updated
-
Does Your State Have a Child and Dependent Care Tax Credit?
Child and Dependent Care Tax Credit Over two dozen states, plus the District of Columbia offer tax credits or deductions for working families.
By Gabriella Cruz-Martínez Published
-
Should Rent Be Part of Your Retirement Plans?
Retirement Taxes Retiree renters may qualify for potential tax savings. Are you considering a move?
By Kate Schubel Last updated