The IRS may owe those who haven’t filed their 2020 taxes hundreds — even thousands — of dollars, but the deadline to claim that money is quickly approaching.
Nearly 1 million taxpayers still have to file their 2020 taxes, due in May 2021. As a result, the IRS is holding more than $1 billion in unclaimed refunds with a due date of May 17.
“There is money left on the table for hundreds of thousands of people who didn’t file their 2020 tax returns,” IRS Commissioner Danny Werfel said in a recent statement. “Taxpayers should start early to ensure they don’t miss out.”
How much money the IRS may owe you
The average unclaimed tax refund is $932 per person (excluding tax credits). However, the IRS will not send this money automatically. If you’re owed an old refund, you’ll need to file your taxes again to claim it before it expires.
Back taxes for the 2020 tax year must be postmarked by May 17, 2024. Missing this deadline means your refund will disappear; after three years of a tax refund going unclaimed, it officially “becomes the property of the United States Treasury,” according to the IRS.
Typically, the deadline to claim old tax refunds is in April, but the tax filing deadline for 2020 taxes has been pushed back to May 2021 due to the pandemic. Hence the deadline of May 17th.
States with the largest average tax refunds waiting to be claimed include:
- Pennsylvania: $1,031
- New York: $1,029
- Maryland: $991
- Rhode Island: $986
- New Hampshire: $982
Idaho has the lowest average refund, at $761.
Some taxpayers could lose much more refund money than that. Many low- and middle-income people may also be eligible for the earned income tax credit for 2020. That year, the EITC was worth up to $6,660 depending on your family’s income and dependents.
Additionally, those who did not receive the full $1,200 stimulus check from March 2020 or the $600 check from December 2020 may be eligible for the Recovery Rebate Credit, which is a refundable tax credit until ‘full amount of stimulus payments that year. .
Both of these credits must be claimed by the same deadline, which is taxpayers’ last chance to get their 2020 stimulus money if they haven’t already.
(These tax credits are refundable and usually included in your total tax refund, but in calculating the typical unclaimed refund amount, the IRS has excluded the tax credits. This means that by missing the deadline, some people may leave more than $9,000 on the table.)
How to request a 2020 tax refund
To claim your tax refund, you’ll need to file your back taxes for 2020. According to the IRS website, you can “file your past due return in the same manner and location as you would file an on-time return.” There are online filing exceptions for IRS Free File and the agency’s new Direct File pilot program.
Some tax software programs will allow you to file prior years’ tax returns, but may require you to print the returns and file them by mail (or purchase a version of the program for the prior year you need to file). Tax professionals at brick-and-mortar tax preparation companies, such as H&R Block or Jackson Hewitt, can also help you.
In short, your tax return will likely require a little more work than your current year’s tax return.
Here’s what you need to do:
- Collect information about your income. Review your documents to determine what you have and what is missing for 2020. The specific documents you need will depend on the type of income you received that year, such as W-2 for employee wages, 1099-MISC or 1099-NEC for gigs or contracts employment and 1099-INT and 1099-DIV for interest or dividends.
- Request your tax transcript for missing income information. If you can’t find all your tax information for 2020, you can get your tax transcript from the IRS for free. Simply create or log in to your IRS account online and request a wage and income transcript, which will include the W-2 or 1099 information needed to complete your return.
- Use the correct forms for your return. When filing back taxes, make sure you use the correct year form. You may need 2020 Forms 1040, 1040-SR, or 1040-NR. These are searchable in the IRS Forms Archive.
- Mail your return to the correct IRS location. After completing your 2020 tax return, you will need to sign it and mail it to the appropriate IRS office. The postal address for your return depends on where you live. If the IRS has sent you specific filing instructions in the mail, follow those.
For further assistance with your back taxes, you can call the IRS toll-free number, 800-TAX-FORM, or visit a local taxpayer assistance center.
Keep in mind that even if you’re owed a 2020 tax refund, it may not result in a good check in the mail. The IRS says the refund may initially go toward outstanding tax bills from other years, unpaid child support payments or past-due debts owed to the federal government.
And if you be in debt IRS money from 2020, you may have to pay penalties on top of the past due amount.
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