Over $1 Billion in Unclaimed Tax Refunds: IRS Urges Action Before May 17 Deadline!
Unclaimed Tax Refunds Exceed $1 Billion for 2020
As the deadline of May 17 approaches for filing tax returns from 2020, the Internal Revenue Service (IRS) has raised concern over more than $1 billion in unclaimed tax refunds, according to the report of Market Realist. Nearly 1 million people across the United States haven’t yet submitted their returns prompting the IRS to urge individuals not to overlook or forget about these potential refunds. IRS Commissioner Danny Werfel stressed the importance of claiming these refunds noting that time is running out.
Among the states with significant unclaimed refunds, Alabama leads with over $16 million awaiting claimants. Following closely are states like Alaska, Arizona, Arkansas, and California each with substantial amounts of unclaimed money from 2020. The median potential refund for these individuals is about $932 highlighting the financial opportunity for those who haven’t filed their returns yet.
(photo: FOX 5 San Diego)
Unlock Your Unclaimed Tax Refunds: Important Deadlines and Eligibility for 2020!
Eligibility for these unclaimed refunds extends to many low- and moderate-income workers, who may qualify for the Earned Income Tax Credit (EITC). Additionally, individuals who didn’t receive one or more Economic Impact Payments or stimulus payments in 2020 may be eligible for the COVID-era Recovery Rebate Credit. These credits can provide significant financial relief to eligible taxpayers.
To claim these potential refunds, individuals need to gather documents from the 2020 tax year, such as Form W-2 for employees, Form 1099 for self-employed and freelance workers, and Form 5498 for reporting individual retirement accounts. The IRS emphasizes the availability of tools and resources on IRS.gov., including the Interactive Tax Assistant (ITA), to help taxpayers file their returns accurately and efficiently.
While there’s no penalty for failing to file a refund and taxpayers must submit their returns within three years of the due date to claim their refunds. With the extended filing deadline for 2020 tax returns ending on May 17, individuals are encouraged to act promptly to secure their refunds. Failure to file a claim may result in the withholding of refunds for subsequent tax years or allocation of refunds towards unpaid taxes, child support or other federal debts.
As the deadline approaches the IRS continues its outreach efforts to ensure that eligible individuals don’t miss out on their rightful refunds. By providing guidance and resources for filing returns and claiming refunds the IRS aims to make the process smooth and efficient for taxpayers seeking to recoup their money from the 2020 tax year.
