Claim deadline for $1.2B in tax refunds from 2022 nearing, IRS warns
#IRS #tax refunds #deadline #unclaimed funds #2020 tax year #Earned Income Tax Credit #May 17 2024
📌 Key Takeaways
- IRS warns of approaching deadline to claim $1.2 billion in unclaimed 2022 tax refunds
- Taxpayers have until May 17, 2024, to file for refunds from the 2020 tax year
- An estimated 1 million taxpayers are eligible for unclaimed refunds averaging $893 each
- Refunds may be withheld if 2021 and 2022 tax returns are not filed
- Low-income individuals may qualify for additional credits like the Earned Income Tax Credit
🏷️ Themes
Tax Refunds, Deadline Warning
📚 Related People & Topics
Internal Revenue Service
Revenue service of the US federal government
The Internal Revenue Service (IRS) is the revenue service for the United States federal government, which is responsible for collecting U.S. federal taxes and administering the Internal Revenue Code, the main body of the federal statutory tax law. It is an agency of the Department of the Treasury an...
Earned income tax credit
Refundable tax credit for low-to-middle class individuals in the U.S.
The United States federal earned income tax credit or earned income credit (EITC or EIC) is a refundable tax credit for low- to moderate-income working individuals and couples, particularly those with children. The amount of EITC benefit depends on a recipient's income and number of children. Low-in...
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Why It Matters
This news matters because it affects millions of taxpayers who may be owed significant refunds from 2020 tax filings. The IRS is holding approximately $1.2 billion in unclaimed refunds that will become government property if not claimed by the May 17, 2024 deadline. This primarily impacts low- and moderate-income workers who may not have filed returns because their income fell below filing requirements, students, part-time workers, and those who experienced life changes during the pandemic. The average median refund is $932, which represents meaningful money for many households facing current economic pressures.
Context & Background
- The 2020 tax year was unusual due to pandemic-related extensions - the original filing deadline was extended to May 17, 2021
- Taxpayers typically have three years to claim refunds before the money becomes property of the U.S. Treasury
- The IRS estimates 1.3 million people haven't filed their 2020 tax returns and may be eligible for refunds
- Many who didn't file in 2020 may have been eligible for pandemic-related credits like the Recovery Rebate Credit
- Some taxpayers may not have filed because their income was below the filing threshold but still had taxes withheld from wages
What Happens Next
Taxpayers have until May 17, 2024 to file their 2020 returns and claim any refunds owed. After this date, the unclaimed funds will be transferred to the U.S. Treasury. The IRS will likely issue reminders as the deadline approaches, and tax preparation services may offer assistance for filing prior-year returns. Some states may have different deadlines for state tax refunds from 2020.
Frequently Asked Questions
Students, part-time workers, and those with income below the filing threshold who had taxes withheld from wages are most likely to have unclaimed refunds. Also, people who experienced major life changes during the pandemic may have overlooked filing.
You must file all missing tax returns, but you can still claim your 2020 refund if you file by May 17, 2024. The IRS may hold your refund if you haven't filed subsequent years' returns.
Request a free wage and income transcript from the IRS using Get Transcript Online or Form 4506-T. You can also contact your former employer or use the IRS's online tools to retrieve necessary documents.
No, there's no penalty for filing a late return if you're due a refund. However, if you owe taxes for other years, those may accrue penalties and interest.
You can still file a return and claim a refund if you had taxes withheld. However, your eligibility for certain credits may be affected if someone else claimed you as a dependent.