Time running out to claim $1 billion in refunds for tax year 2020, IRS says

Nearly one million Americans have unclaimed tax refunds totally more than $1 billion, according to the Internal Revenue Service.

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The IRS announced that almost 940,000 people have unclaimed refunds for tax year 2020 but face a May 17 deadline to get those returns in before time runs out.

More than $1 billion in refunds remain unclaimed because people haven’t filed their 2020 tax returns yet, the IRS said.

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“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.

“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.”

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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.

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The IRS wants remind taxpayers who are 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.

The average median refund for 2020 is $932. The actual refund amount will vary based on a household’s tax situation.

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 and Publications page or by calling toll-free 800-TAX-FORM (800-829-3676).

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