IRS Warns Americans To Claim Over $1B In 2020 Tax Refunds Before They Expire

The IRS has issued a warning to taxpayers across the United States, cautioning they may lose over $1 billion in unclaimed tax refunds.

The Internal Revenue Service has issued a stark warning to taxpayers across the United States, cautioning that they may be leaving over $1 billion in unclaimed tax refunds on the table, according to The Associated Press. As the May 17 deadline looms, approximately 940,000 individuals are urged to take immediate action to submit their tax returns for the 2020 tax year.

With an average median refund of $932 for 2020, states like Texas, California, Florida, and New York have the largest number of potentially eligible recipients. IRS Commissioner Danny Werfel emphasized the situation’s urgency, stating, “We want taxpayers to claim these refunds, but time is running out…taxpayers should start soon to make sure they don’t miss out.”

Werfel stressed the importance of reviewing records promptly to avoid missing the deadline, noting that some individuals may not even realize they are owed a refund. As tax season commenced on Jan. 29, over 71.5 million individual tax filings have already been submitted to the IRS this year.

If they need to file a return, the IRS recommends that individuals procure vital documents like W-2s, 1098s, 1099s, or 5498s from their respective employers or banks. Alternatively, taxpayers can access the “Get Transcript Online” tool on IRS.gov, which enables them to request a complimentary wage and income transcript.

Although the customary deadline typically coincides with April 15, this year’s elongation to May 17, instigated by the COVID-19 pandemic, offers a brief respite. However, failing to file returns for the tax years 2021 and 2022 may result in the retention of 2020 refunds until those commitments are met.

According to CNET, a portion of your refund may have been redirected to settle outstanding debts, including federal and state taxes, unemployment compensation, child support, spousal support, or other federal obligations such as student loans. If you anticipated receiving a refund for the tax year 2021 but found it absent upon filing your previous tax return, your refund may have been offset.

The IRS oversees refund offsets related to overdue federal taxes, and affected individuals should expect to receive a notification from the agency clarifying the offset.