2020 Tax Refunds: Each year, the IRS encourages taxpayers to file their tax returns on time to receive any refunds owed. For the 2020 tax year, over $1.3 billion in refunds remains unclaimed as the May 17, 2024, deadline approaches. In this post, we will provide more details about the unclaimed refund amounts, important dates, eligibility factors, and steps to take to claim refunds before time runs out.
Unclaimed Refunds: $1.3 Billion at Stake
The $1.3 billion in unclaimed refunds for 2020 represents tax payments withheld from paychecks throughout the year, as well as refundable tax credits some taxpayers may qualify for. By filing a 2020 tax return before the deadline, individuals can receive refunds for withholdings and certain credits they are owed. This post will explore these unclaimed funds and how readers can claim their money if eligible.
Important Dates and Deadlines
The standard filing deadline for most taxpayers to submit their 2020 tax return and pay any remaining taxes owed was April 15, 2021. However, due to the economic impacts of the COVID-19 pandemic, the IRS announced an extension of certain tax deadlines in 2020 and 2021 to provide relief.
Through this relief, the filing deadline for 2020 tax returns was extended to May 17, 2021. This gave individual taxpayers an additional month to complete and submit their 2020 Form 1040 tax returns. The IRS wanted to ease burdens on taxpayers during the pandemic disruptions.
Normally, taxpayers have up to three years after the tax filing deadline to claim a refund for a previous tax year. However, since the 2020 tax deadline was extended to May 17, 2021, this also extended the deadline to claim a refund for the 2020 tax year.
Now, taxpayers have until May 17, 2024, to file a 2020 tax return and receive any refund owed for overpayments made in 2020 through tax withholdings or credits. After this date, taxpayers will no longer be able to file a 2020 return or claim a refund for that tax year. So this May 17, 2024 deadline represents the final chance to claim a 2020 tax refund.
Important Deadlines Recap:
- The regular filing deadline for 2020 tax returns was April 15, 2021.
- Due to the pandemic, the IRS extended the deadline to May 17, 2021.
- Now the final deadline to claim a 2020 tax refund is May 17, 2024.
Eligibility and Unclaimed Credits
Many people may be eligible for tax refunds but miss out by not filing a return. The $1.3 billion in unclaimed refunds for 2020 does not include valuable tax credits like the Earned Income Tax Credit that many low-to-moderate income individuals and families could qualify for.
The EITC is worth up to $6,660 based on income and family size. It helps working families and individuals below certain income thresholds. Many may be eligible and not realize it. Filing a 2020 tax return is the only way to claim the EITC and get the refund.
Another important credit is the Recovery Rebate Credit. This is for people who did not receive one or more stimulus payments in 2020-2021. Filing allows them to receive these payments as a refundable tax credit.
Eligibility to Claim Unclaimed Tax Refunds:
- The refunds are available to people who did not file a 2020 federal income tax return. Filing a 2020 return is the only way to claim a refund.
- Many people may be eligible for refundable tax credits even if they have very low incomes or did not originally think they had to file a return.
- The Earned Income Tax Credit is a major unclaimed credit that can result in refunds of up to $6,660 for working individuals and families earning less than $57,000. Over $1 billion in EITC goes unclaimed each year.
- The Recovery Rebate Credit allows people to claim any stimulus payments from 2020 that they did not receive but were eligible for (up to $1,200 per individual, $2,400 per couple filing jointly).
- To claim the refund, taxpayers must file a 2020 Form 1040 or 1040-SR by the May 17th deadline. Free filing help is available through IRS partner sites.
- Refunds can be claimed even by those who did not earn enough to normally require filing. As long as a valid Social Security Number is provided, refunds will not be denied.
Key Steps to Claim Unclaimed 2020 Tax Refunds
- Determine Eligibility: Check if you had any earned income, qualifying children, stimulus payments, etc., in 2020. This information will be needed to claim refundable tax credits.
- Gather Documents: Use the options provided like Get Transcript tool, Form 4506-T to request wage/income transcripts from IRS if you don’t have W-2, 1099 forms from employers/payers.
- File Tax Return: Obtain a blank Form 1040 or 1040-SR for tax year 2020. Fill it out completely and accurately based on information from transcripts/documents.
- Claim Refundable Credits: Make sure to claim Earned Income Tax Credit and Recovery Rebate Credit if eligible based on 2020 income and family status.
- Submit Tax Return: File the completed 2020 tax return electronically or by mail before the May 17, 2024 deadline. Request direct deposit for the fastest refund.
- Follow Up If Needed: Check status of refund online or call IRS helpline if any issues arise during processing.
- Seek Free Tax Help: Use Volunteer Income Tax Assistance programs or Interactive Tax Assistant tool for guidance in preparing an accurate return.
The key is to take action now to file a 2020 return and claim any refunds owed by the fast-approaching May deadline. Free help options are available to assist taxpayers.
Free Filing Assistance Don’t struggle through the process alone. Free tax filing help is available through VITA, AARP, and other nonprofit programs. Certified volunteers can help prepare and file your return.
Taking Action With millions in total refunds at stake, it is worthwhile to spend a few hours gathering documents and filing your overdue 2020 tax return. Contact the IRS or a tax professional before May 17, 2024 to claim your refund and avoid missing out.
State-by-State Estimations for 2020 Income Tax Refunds
The Internal Revenue Service (IRS) has provided state-specific estimations regarding the potential number of individuals eligible for income tax refunds for the year 2020. These estimations include both the estimated number of individuals in each state and the median potential refund that filers may qualify to receive. It’s essential to note that the actual refund amount individuals receive will be contingent upon their household’s unique tax circumstances.
- Alabama
- Estimated number of individuals: 15,200
- Median potential refund: $926
- Total potential refunds: $16,839,800
- Alaska
- Estimated number of individuals: 3,700
- Median potential refund: $931
- Total potential refunds: $4,335,300
- Arizona
- Estimated number of individuals: 25,400
- Median potential refund: $871
- Total potential refunds: $26,939,600
- Arkansas
- Estimated number of individuals: 8,700
- Median potential refund: $923
- Total potential refunds: $9,392,600
- California
- Estimated number of individuals: 88,200
- Median potential refund: $835
- Total potential refunds: $94,226,300
- Colorado
- Estimated number of individuals: 18,500
- Median potential refund: $894
- Total potential refunds: $20,109,900
- Connecticut
- Estimated number of individuals: 9,800
- Median potential refund: $978
- Total potential refunds: $11,343,600
- Delaware
- Estimated number of individuals: 3,600
- Median potential refund: $945
- Total potential refunds: $4,156,500
- District of Columbia
- Estimated number of individuals: 2,900
- Median potential refund: $968
- Total potential refunds: $3,503,800
- Florida
- Estimated number of individuals: 53,200
- Median potential refund: $891
- Total potential refunds: $58,210,500
Conclusion: Claim Your $1 Billion in 2020 Tax Refunds Today
The approaching May 17, 2024 deadline marks the final opportunity for taxpayers to claim their unclaimed refunds for the 2020 tax year. With over $1.3 billion at stake, it’s imperative to take action now. By understanding eligibility, gathering necessary documentation, and filing accurately, individuals can secure their rightful refunds. Don’t miss this chance – act promptly to reclaim what’s rightfully yours before it’s too late.
