The Internal Revenue Service (IRS) in the United States is reminding taxpayers that there is over $1 billion in unclaimed tax refunds for the year 2020. Texas leads the way with over $100 million in unclaimed refunds, followed by California with over $94.22 million. The deadline to claim the 2020 tax refunds is this Friday, May 17th.
According to the IRS, nearly 940,000 individuals have not yet claimed their 2020 tax refunds. Texas has the highest number of unclaimed refunds, with approximately 93,400 people, followed by California with around 88,200 individuals. Florida ranks third with 53,200 people, and New York comes next with 51,400.
Under federal law, taxpayers have three years to file their tax returns and claim refunds. After the three-year period expires, regulations typically prohibit the issuance of refund checks or any offsetting claims, including transferring overpaid withholding to future tax years. Due to the COVID-19 pandemic, the deadline for filing 2020 tax returns was extended to May 17, 2021, which sets the three-year window for unclaimed 2020 refunds to close on May 17, 2024.
The IRS emphasizes that many individuals who have not filed may be eligible for the Earned Income Tax Credit (EITC), Recovery Rebate Credit (RRC), or other applicable credits.
Many low to moderate-income individuals may qualify for EITC, with the credit potentially reaching up to $6,660 for eligible taxpayers with qualifying children. The RRC is designed for individuals who did not receive one or more Economic Impact Payments in 2020 and 2021.
Taxpayers who need to file their 2020 tax returns should obtain their W-2, 1098, 1099, or 5498 forms from their employers or banks, or use IRS online tools to access wage income forms for free. Taxpayers can visit the IRS website or call 800-829-3676 for assistance.
The IRS assures taxpayers that those who file late to claim their refunds will not be penalized. The median unclaimed refund amount for 2020 is $932, with California’s median refund amount at $835.
Each year, the IRS sees approximately $1 billion to $1.5 billion in unclaimed tax refunds.