$1 Billion in Unclaimed Checks and Credits from the IRS: Deadline Approaching Soon

The IRS is holding over $1 billion in unclaimed tax refunds from 2020, but deadline for claim submission is running out, with 940,000 Americans left until May 17.

(Credit: CNBC)

$1 billion in unclaimed stimulus checks: According to the Internal Revenue Service, its coffers are holding over $1 billion in unclaimed stimulus checks from the 2020 tax year. The time to submit a claim, nevertheless, is running out.

The IRS has given roughly 940,000 Americans till May 17 to file their 2020 tax forms and receive their share of the unclaimed money. The government body projects a $932 median refund.

“Hundreds of thousands of people that haven’t filed 2020 tax returns still have money on the table,” IRS Commissioner Danny Werfel stated in March. “We want taxpayers to claim these refunds, but time is running out for those who may have overlooked or forgotten about these refunds.”

Tax payers usually have three years from the date of the April 15 tax filing deadline to claim past refunds. The Covid-19 pandemic, however, forced the IRS to extend that deadline to May 17.

Werfel stated in the IRS statement, “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.”

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If you fail to file your 2021 and 2022 tax returns, the IRS warns that your refund could be withheld. Your return will also be used to satisfy past-due federal government debts, including past-due child support, if you owe money to the IRS or a state tax agency.

The IRS reported that the median refund size for the 2020 tax year was $932, with the amount varying slightly by state.

Alabama: $926
Alaska: $931
Arizona: $871
Arkansas: $923
California: $835
Colorado: $894
Connecticut: $978
Delaware: $945
District of Columbia: $968
Florida: $891
Georgia: $900
Hawaii: $979
Idaho: $761
Illinois: $956
Indiana: $922
Iowa: $953
Kansas: $900
Kentucky: $920
Louisiana: $957
Maine: $923
Maryland: $991
Massachusetts: $975
Michigan: $976
Minnesota: $818
Mississippi: $861
Missouri: $893
Montana: $851
Nebraska: $901
Nevada: $890
New Hampshire: $982
New Jersey: $920
New Mexico: $868
New York: $1,029
North Carolina: $895
North Dakota: $953
Ohio: $909
Oklahoma: $902
Oregon: $847
Pennsylvania: $1,031
Rhode Island: $986
South Carolina: $840
South Dakota: $892
Tennessee: $909
Texas: $960
Utah: $836
Vermont: $911
Virginia: $914
Washington: $976
West Virginia: $950
Wisconsin: $837
Wyoming: $961

Unemployment benefits and the 2020 tax year

Millions of people who were fired by their companies when the epidemic started either permanently or temporarily filed for unemployment benefits during the 2020 tax year. Passed in early March 2021, the IRS stated that “individual taxpayers may exclude up to $10,200 of unemployment compensation they received in the tax year 2020 only.” Taxpayers that file jointly with their spouse can double this amount.

But this further tax bill decrease is exclusive to individuals who earned $150,000 or less in 2020; it does not apply to married couples filing jointly. The IRS was very explicit that any unemployment benefits received exceeding $10,200 had to be reported as income and subject to taxation.

Last time to pick up the $1,200 stimulus check

Congress passed legislation in March 2020 that included $1,200 in stimulus cheques, or economic impact payments. Everyone earning under the income limits—which were set at an Adjusted Gross Income of $75,000 ($150,000 for married couples filing jointly)—got payments; the stimulus check value tapered off to a maximum of $99,000 ($198,000 for married couples filing jointly). The last month to claim yours is this one, if you did not receive yours. Make sure you don’t miss the cutoff!

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When is the filing deadline?

Those taxpayers who haven’t filed their 2020 return yet have until May 17 to do so. If you want to file your return yourself, you will need to submit it on paper. “Prior year returns can only be filed electronically by registered tax preparers for the two previous tax years,” according to the IRS website.

The 2020 return is out of that window, so you have to send the tax office all the necessary paperwork the old-fashioned way. Getting your questions answered and avoiding mistakes can be accomplished by calling the IRS at 800-829-1040 between 7 a.m. and 7 p.m. local time. You may also schedule in-person assistance with your neighborhood office. Access the IRS website to view the office list.

Eduvast Desk