There is $1 billion in unclaimed 2020 tax refunds up for grabs — but the last chance to file returns and collect the money is approaching.
Nearly 940,000 taxpayers have until May 17 to file 2020 returns and claim their refund, the IRS said in a “final reminder” this week. The median possible payment is $932, according to the agency.
The deadline is “terribly important” because there’s a three-year refund expiration after each tax deadline, said certified public accountant John Karls, partner at accounting firm Armanino.
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The 2020 tax deadline was postponed to May 17, 2021, amid the pandemic — and the three-year deadline to file 2020 returns and collect refunds is now one week away.
“If you let if you let it slip, there’s nothing anybody can do,” said Bill Smith, national director of tax technical services at financial services firm CBIZ MHM. ”You won’t get your refund when the statute of limitations has run out.”
You won’t get your refund when the statute of limitations has run out.Bill Smithnational director of tax technical services at CBIZ MHM
Plus, “2020 was the year of with additional tax breaks or credits” for certain filers, noted Karls.
That could include the recovery rebate credit — a nonrefundable tax break for eligible filers who didn’t receive economic impact payments, also known as “stimulus checks,” linked to coronavirus relief.
If you’re eligible for relief and don’t file your return by May 17, you’re “truly leaving dollars on the table,” Karls added.
There’s a ‘roadmap’ for past returns
If you still haven’t filed 2020 returns and are feeling overwhelmed by where to begin, the IRS has tools to make the process easier, according to Karls.
You can log into your free IRS online account to access your wage and income transcripts, which include your certain tax forms. This will include Forms W-2, 1098, 1099 and 5498.
“For many taxpayers, this is by far the quickest and easiest option” for collecting missing information, according to the IRS.
“That’s going to give a roadmap” and let you know if you need to contact a past employer, Karls said. But it may take time to collect the missing forms, so you should start the process as soon as possible, he said.
You can also collect missing tax forms online via your bank or other financial institutions.