May 17 Was the Deadline for $1 Billion in Unclaimed IRS Tax Refunds

Unclaimed tax refunds totaling about $1 billion remained unclaimed at the IRS because millions of taxpayers hadn't filed tax returns for the 2020 tax year. (In other words, you might have had money waiting for you and not have known.)

“There’s money remaining on the table for hundreds of thousands of people who haven’t filed 2020 tax returns,” IRS Commissioner Danny Werfel said in a release. “We want taxpayers to claim these refunds, but time is running out for people who may have overlooked or forgotten about these refunds.”

The deadline to file these returns was Friday, May 17, 2024.

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Unclaimed IRS tax refund

• Normally, taxpayers have three years to file their federal tax return and to claim tax refunds due, if any. 
• After the three years pass, the unclaimed refund money becomes U.S. Treasury Department property. 
• While that is the normal rule, the three years for filing returns and claiming refunds were extended for 2020 federal tax returns because of the pandemic.

So, for 2020 returns that would typically have been filed in April 2021, the window for unfiled returns was pushed to May 17, 2024. That means that people who still haven’t filed their 2020 returns have missed the deadline to avoid losing tax refunds associated with that tax return.

Average tax refund amount

How much money are we talking about? The IRS says that the average median unclaimed refund amount for 2020 is $932. That means about half the refunds are more than that amount and about half are less. 

In terms of who is probably due a refund, Commissioner Werfel said, “Students, part-time workers, and others” who may have little income sometimes do not file a tax return and never realize they may be owed a refund.

• Even though the agency has estimated the average refund, the amount you may receive (if you are due a refund and filed your 2020 tax return by the May 17 deadline) will depend on your specific tax situation.
• (Also, it’s important to keep in mind that if you owe the IRS or a state tax agency or have unpaid child support or other federal debts, you might not receive a refund.

Additionally, by not  filing a tax return, the IRS notes that “people stand to lose more than just their refund of taxes withheld or paid during 2020.” 

For example, many people with low and moderate incomes 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. Another tax credit that may apply for 2020 tax returns includes the Recovery Rebate Credit.

Unclaimed IRS refunds by state

The IRS published state-by-state estimates of how many people might be due refunds. That information also shows the median potential refund and the total potential refunds for each state.

• For example, in California, about 88,200 people had unclaimed IRS refunds at an estimated potential median amount of $835 each. That’s more than $94 million in unclaimed money. 
• Some states with relatively high estimated potential median refund amounts are Pennsylvania at $1,031, New York at $1029, and Maryland at $991. 
• In West Virginia, as another example, the IRS estimates that about 3,800 people were due refunds with the total potential refunds for the state being a little over $4 million. 

For more information about the number of people due 2020 IRS refunds and the estimated amounts of money involved, visit the IRS website. 

Unclaimed 2020 refund: What to do

If you thought you had an unclaimed IRS refund, you should have reviewed and gathered the records needed to file your 2020 federal income tax return by May 17, 2024. That might have seemed daunting because nearly three years have passed, but the IRS has ways you can request key documents and transcripts.

For example, if you didn't have a W-2, or other important tax forms from 2020, like a 1099 form, you could request copies from your former employer. Banks, or other payors, for certain tax forms, may be able to help as well.

If your former employers or payors cannot help you, the IRS has a Get Transcript Online tool.  If you need to file your federal income tax return for 2020, the IRS has free resources like the Interactive Tax Assistant. You might also be eligible for free tax preparation help through the VITA and Tax Counseling for the Elderly programs. 

There is no penalty for claiming a refund on a late-filed tax return and the IRS says direct deposit is the recommended way to receive your refund. 

Related

• Types of income the IRS Doesn't Tax
• What's the Standard Deduction?
• Can the Earned Income Tax Credit Help You?