The IRS has issued a warning to taxpayers, stating that there may be over $1 billion in unclaimed refunds left on the table. Approximately 940,000 individuals in the U.S. have until May 17 to submit their tax returns for unclaimed refunds from the 2020 tax year. The average median refund for 2020 is $932, with states like Texas, California, Florida, and New York having the largest number of individuals potentially eligible for these refunds.
IRS Commissioner Danny Werfel emphasized the importance of taxpayers claiming these refunds before the deadline, urging individuals to start gathering necessary documents such as W-2s, 1098s, 1099s, or 5498s from their employers or banks. Failure to file and claim tax refunds within three years results in the funds becoming the property of the U.S. Treasury. The deadline for 2020 unfiled returns was extended to May 17 this year due to the COVID-19 pandemic, but taxpayers must also file returns for 2021 and 2022 to receive any withheld 2020 refunds.
Werfel encouraged individuals to review their records and gather necessary documentation to avoid missing the May deadline for claiming refunds. Tax season officially began on January 29, with over 71.5 million individual tax filings submitted to the IRS so far this year. It’s crucial for taxpayers to act promptly to ensure they don’t miss out on potential refunds.