More than half a million Americans can receive a tax refund of up to $932 from the IRS. We tell you if you are eligible to receive it and how to ask for the money. As we’ve been reporting recently, the IRS has over $1 billion in unclaimed refunds, and the deadline to claim them is this week.
These refunds correspond to tax returns for the 2020 tax year. By then, the coronavirus pandemic was just beginning, and Americans, like billions of people around the world, were suffering from the economic impacts of a paralyzed world.
There were many complications for taxpayers, both to file their returns and to generate sufficient income and maintain their standard of living. That’s why the IRS extended the deadline by up to one year, both for filing tax returns and for claiming the corresponding tax refunds.
How to Claim the 2020 $932 Tax Refund From the IRS?
The final deadline is now May 17, 2024. From that day on, the United States Treasury takes possession of the money as established by legislation. All unclaimed tax refunds become the property of the Federal Government and will be used as public funds.
As mentioned, the refund corresponds to the year 2020. To claim the money, eligible taxpayers must have filed their tax returns. If you haven’t already, you need to do it urgently before the May 17 deadline arrives. According to the IRS, more than one million people are eligible to receive these refunds.
The IRS clarifies that there is no penalty for not filing a tax return if a refund is due. However, a return claiming a refund must be submitted within 3 years of the due date for it to be allowed and enabled by the agency.
Thus, the 2020 tax returns would have enabled taxpayers to claim their refunds until 2023. But since the date was extended by one year, it will now be until May 17, 2024.
Earned Income and Earned Income Tax Credit (EITC) Could Also Be Claimed
In addition to this refund, eligible taxpayers can claim other types of tax credits, such as the Earned Income Tax Credit (EITC), which has a maximum amount of $6,660 in 2024.
Those who want to claim the Earned Income Tax Credit must have earned income and meet certain adjusted income (AGI) as well as credit limits for current, previous and future tax years.
Earned income includes all taxable economic income, such as wages earned by working for someone else or for a company, as well as for yourself as an independent taxpayer or farm owner. It also includes income from a union strike and certain disability benefits before the minimum retirement age, among others. Those from interest, dividends, pensions, social security, unemployment benefits, among others, are not counted as earned income.
Let’s do an example exercise with a woman we will call Mary. Mary has the following income:
- $50,000 salary/wage.
- $12,000 in rental income.
- A $8,500 salary earned as a part-time Uber driver.
- $500 in bond interest. Mary’s gross income is the sum of all these incomes, which is $71,000.
Now, let’s look at the adjustments Mary can make to her gross income:
- $250 in educator expenses.
- $2,500 in student loan interest. The total adjustments Mary can subtract from her gross income is $2,750.
Applying the Adjusted Gross Income (AGI) formula: AGI = Gross Income – Adjustments.
Substituting Mary’s values: AGI = $71,000 (Gross Income) – $2,750 (Adjustments). AGI = $68,250.
Therefore, Mary’s Adjusted Gross Income (AGI) is $68,250.
Use these official IRS table organized by tax year to find the maximum amounts for:
- Adjusted gross income (AGI)
- Investment income you can make
- Credit amount you can claim
