By Suzanne Blake
Reporter
0
Share
Newsweek is a Trust Project member
See more of our trusted coverage when you search.Prefer Newsweek on Googleto see more of our trusted coverage when you search.
Americans have just one day left to claim some major direct payments courtesy of the federal government's previous stimulus checks.
After May 17, the Internal Revenue Service will no longer be holding onto more than $1 billion in unclaimed refunds from the tax year 2020.
Read more: Compare the Best High-Yield Savings Accounts to Grow Your Savings
Read More on U.S.
"After the expiration of the three-year period, the refund statute generally prevents the issuance of a refund check and the application of any credits, including overpayments of estimated taxes or withholding amounts, to other tax years that are underpaid," the IRS said in a statement on May 6.
The money was held for several years for many Americans who never filed taxes in 2021 and therefore did not see their refunds or the 2020 recovery rebate credit.
...
The average unpaid refund is $934, meaning Americans could be leaving a significant chunk of money on the table if they neglect to claim it by Friday.
Read more: 7% Interest Rate Savings Accounts
"The average unpaid refund is over $900, and with inflation affecting virtually every aspect of the consumers' lives, that money could certainly come in handy if you haven't already filed," Alex Beene, a financial literacy instructor at the University of Tennessee at Martin, previously told Newsweek.
Earlier this year, the IRS said roughly 940,000 taxpayers had yet to claim the refunds even after the agency extended their shelf life as the deadline to file taxes in 2021 moved from April 15 to May 17. Typically, the IRS only holds onto refunds for three years after their initial tax deadline.
"Americans have so many unclaimed tax dollars due to the pandemic and the aftermath of tax credits and filing delays, which left a whole host of refunds yet to be processed, or tax filings to be neglected," finance expert Kevin Thompson, the founder and CEO of 9i Capital Group, previously told Newsweek.
How To Claim the Refund
The key rule to remember if you're one of the hundreds of thousands of Americans who still hasn't claimed their 2020 payment is that you'll need to file the tax return on paper, postmarked by May 17.
Read more: Compare Top CD Rates
Once that day passes, all tax returns filed will be tossed out, and you won't be able to get your rightful refund.
Currently, there's no way to check if the IRS is holding onto money for you, so you'll need to file a return to see if you get a refund if you're unsure.
Still, you can calculate the recovery rebate credit you're owed by using tax prep software for the Form 1040 Recovery Rebate Credit Worksheet. All it requires is the tax year and amount for stimulus checks already received.
Keep in mind, you might not receive the full tax refund if you still owe unpaid federal or state taxes. The IRS could also offset these funds and send them to unpaid child or spousal support or in some cases, student loans.
If you're filing your tax return for 2020 today in time for the May 17 deadline, just remember you'll need your W-2s, 1098 and 1099 forms from that year.
View 0 Comments
Submit Correction
View Editorial & AI Guidelines