The IRS recently announced that nearly a million American taxpayers – approximately 940,000 – who have not yet filed tax returns for tax year 2020 may be due to get a refund. The IRS estimates typical refunds for these returns as over $900.
Filing Deadline
Taxpayers who have not yet filed a tax year 2020 return have until May 17, 2024 to file and potentially claim a refund. After that date, any refunds for unfiled 2020 returns revert to the Treasury Department.
In general, taxpayers have exactly three years to file a return and claim refunds. But due to the pandemic, the IRS extended the typical April 15 filing deadline to May 17 and thus the 3-year window runs to May 17.
Unclaimed Refunds
The unclaimed refunds include both full-time and part-time workers; some may have neglected to file a return because they did not meet the income threshold for being required to file. Tax year 2020 included the recovery rebate credits which are refundable even for taxpayers who had little or no income in that year.
The earned income credit based on family income and size is another refundable credit – worth as much as $6,600 in 2020.
Documents Needed
You may need to get past W-2 wage statements from employers and interest statements from banks. If you are unable to get these, you can order a “wage and income” transcript from the IRS which shows the income figures submitted to them from these sources.
Filing 2020 Tax Returns
The 2020 returns must be filed on paper and mailed to the IRS whether you use a self-submitting tax software or a professional tax preparer. A few exceptions to the May 17 deadline may apply, such as military service or physical/mental impairments that affect the taxpayer’s ability to manage their financial affairs.
Your CPA or professional tax preparer can help you determine if you would benefit from filing a 2020 tax return or are required to file one.
If you have questions about this featured topic or other accounting and tax related topics, please do not hesitate to contact us at 727-327-1999 OR [email protected].
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