People who haven’t yet filed their 2020 return may get some money from the IRS. The money in question isn’t any stimulus check, but rather, more than $1 billion in unclaimed tax refunds for the 2020 tax year that the IRS is sitting on. However, taxpayers need to hurry up as the deadline to claim 2020 refunds is quickly approaching.
What’s the deadline to claim 2020 refunds?
The IRS recently said that it is holding onto more than $1 billion in unclaimed refunds for the 2020 tax year and warned that it won’t keep these refunds available much longer.
The refunds that the IRS is holding are for people who haven’t filed their 2020 tax return for whatever reason, whether they believed they didn’t qualify, they forgot to file their return, or they didn’t want to deal with the stress of filing their tax return.
In addition to the refunds, the agency may also be holding onto taxpayers’ 2020 recovery rebate credit. According to the IRS, almost 940,000 people across the U.S. may have unclaimed refunds for the 2020 tax year, and the average unpaid refund is $932.
“We want taxpayers to claim these refunds, but time is running out for people who may have overlooked or forgotten about these refunds,” the IRS said in March, adding that it won’t be holding onto the refunds after May 17. Thus, the deadline for taxpayers to claim their 2020 refunds is approaching fast.
Taxpayers usually have three years to claim their old refunds by the April 15 tax filing deadline. However, for 2020, the agency extended the deadline to May 17 because of the COVID-19 pandemic.
After the May 17 deadline to claim the 2020 refunds, the unclaimed money will become the property of the U.S. Treasury.
How to claim 2020 refunds
To claim a 2020 refund, taxpayers need to file a tax return for that year. However, to file their 2020 tax return, taxpayers must collect the necessary documents related to the 2020 tax year, such as their Form W-2, which is issued by employers and includes details about a person’s income from earlier years, including taxes withheld.
Taxpayers may also need Form 1099, which is used to report income from freelance work and may apply to other non-employer income as well. Another required form is Form 5498, which is used to report contributions to individual retirement accounts.
Taxpayers who don’t have these forms can request copies of them from their employer or bank. Alternatively, a taxpayer can use the IRS’s “Get Transcript Online” tool to get their free wage and income transcript that includes the documents needed to file a tax return.
Taxpayers can use online tax software to prepare their returns, but they can’t file their 2020 returns electronically. They will have to take a print of their completed tax return form and mail it to their regional IRS office, which depends on their location.
