WASHINGTON — The Internal Revenue Service estimates more than $1 billion in refunds remain unclaimed because people haven't filed their 2020 tax returns yet. So, this is your reminder to not leave money on the table and file before the May 17 deadline.
Approximately 940,000 people in the U.S. have unclaimed refunds for tax year 2020. The average median refund for the year is $932.
“There’s money remaining on the table for hundreds of thousands of people who haven’t filed 2020 tax returns,” said IRS Commissioner Danny Werfel. “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.”
Under the law, taxpayers usually have three years to file and claim their tax refunds. If they don’t file within three years, the money becomes the property of the U.S. Treasury.
But for 2020 tax returns, people have a little more time than usual. The three-year window for 2020 unfiled returns was pushed from April 15 to May 17 due to the COVID-19 pandemic.
The IRS has also reminded those who may be entitled to the COVID-era Recovery Rebate Credit in 2020 that time is running out to file a tax return and claim their money.
“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,” Werfel said. “People may have just overlooked these, including students, part-time workers and others. Some people may not realize they may be owed a refund. We encourage people to review their files and start gathering records now, so they don’t run the risk of missing the May deadline.”
People stand to lose more than just their refund of taxes withheld or paid during 2020 by failing to file a tax return. The IRS says many low- and moderate-income workers 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. The EITC helps individuals and families whose incomes are below certain thresholds. The thresholds for 2020 were:
- $50,594 ($56,844 if married & filing jointly) for those with three or more qualifying children;
- $47,440 ($53,330 if married & filing jointly) for people with two qualifying children;
- $41,756 ($47,646 if married & filing jointly) for those with one qualifying child, and;
- $15,820 ($21,710 if married & filing jointly) for people without qualifying children.
The IRS reminds taxpayers seeking a 2020 tax refund that their funds may be held if they have not filed tax returns for 2021 and 2022. In addition, any refund amount for 2020 will be applied to amounts still owed to the IRS or a state tax agency and may be used to offset unpaid child support or other past-due federal debts, such as student loans.
Current and prior year tax forms (such as the tax year 2020 Forms 1040 and 1040-SR) and instructions are available on the IRS.gov Forms & Instructions page or by calling toll-free 800-TAX-FORM (800-829-3676).
WATCH NEXT: