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May 17 Deadline to File 2020 Tax Returns

The IRS estimates over $1 billion in tax refunds remain unclaimed from 2020. Approximately 940,000 taxpayers did not file their 2020 tax returns. Under the law, taxpayers usually have three years to file and claim their tax refunds. If they don’t file within three years, the money becomes the property of the U.S. Treasury. During the COVID-19 pandemic, the IRS extended the tax filing deadline to May 17th.

“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,” said IRS Commissioner Danny Werfel. “People may have just overlooked these, including students, part-time workers and others. Some people may not realize they may be owed a refund. We encourage people to review their files and start gathering records now, so they don’t run the risk of missing the May deadline.”

Taxpayers have until May 17, 2024, to file their 2020 tax return.

If a return is not filed, taxpayers stand to lose more than just their refund of taxes withheld or paid during 2020. Many low- and moderate-income workers 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. The EITC helps individuals and families whose incomes are below certain thresholds. The thresholds for 2020 were:

  • $50,594 ($56,844 if married filing jointly) for those with three or more qualifying children;
  • $47,440 ($53,330 if married filing jointly) for people with two qualifying children;
  • $41,756 ($47,646 if married filing jointly) for those with one qualifying child, and;
  • $15,820 ($21,710 if married filing jointly) for people without qualifying children.

Need to file a 2020 tax return? Several options to get key documents

Although it’s been a few years since 2020, the IRS reminds taxpayers there are ways they can still gather the information they need to file this tax return. But people should start early to make sure they have enough time to file before the May deadline for 2020 refunds. Here are some options:

Request copies of key documents

Taxpayers who are missing Forms W-2, 1098, 1099 or 5498 for the years, 2020, 2021 or 2022 can request copies from their employer, bank or other payers.

Get Transcript Online at IRS.gov

Taxpayers who are unable to get those missing forms from their employer or other payers can order a free wage and income transcript at IRS.gov using the Get Transcript Online tool. For many taxpayers, this will be the quickest and easiest option.

Request a transcript

Another option is for people to file Form 4506-T with the IRS to request a “wage and income transcript.” A wage and income transcript shows data from information returns received by the IRS, such as Forms W-2, 1099, 1098, Form 5498 and IRA contribution information. Taxpayers can use the information from the transcript to file their tax return. Keep in mind that these written requests can take several weeks; people are strongly urged to try the other options first.

US money

Local Estimates of Individuals, by State, Who May be Due 2020 Income Tax Refunds

Based on tax information currently available, the IRS estimated how many people in each state may be entitled to a tax refund. The actual refund amount will vary based on a household’s tax situation.

StateEstimated # of IndividualsMedian Potential RefundTotal Potential Refunds
New Jersey24,400$920$27,408,300
Data provided by the IRS at https://www.irs.gov/newsroom/time-running-out-to-claim-1-billion-in-refunds-for-tax-year-2020-taxpayers-face-may-17-deadline

Possible Delay in Tax Refund

The IRS reminds taxpayers seeking a 2020 tax refund that their funds may be held if they have not filed tax returns for 2021 and 2022. In addition, any refund amount for 2020 will be applied to amounts still owed to the IRS or a state tax agency and may be used to offset unpaid child support or other past due federal debts, such as student loans.

Current and prior year tax forms (such as the tax year 2020 Forms 1040 and 1040-SR) and instructions are available on the IRS.gov Forms & Instructions page or by calling toll-free 800-TAX-FORM (800-829-3676).

As always, should you have questions on this or other matters affecting you or your business, please call 215.675.8364 or email us to speak with a CPA today.

DISCLAIMER: The WM Update, WM Wednesday Wisdom, WM Daily Update, and other related communications are intended to provide general information, as of the date of this communication, and may reference information from reputable sources. Although our firm has made every reasonable effort to ensure that the information provided is accurate, we make no warranties, expressed or implied, on the information provided. As legislative efforts are still ongoing, we expect that there may be additional guidance and clarification from regulators that may modify some of the provisions in this communication. Some of those modifications may be significant. As such, be aware that this is not a comprehensive analysis of the subject matter covered and is not intended to provide specific recommendations to you or your business with respect to the matters addressed.

For more information, visit the IRS website.