The IRS has set a COVID refund deadline of July 10, 2026, providing a rare chance for taxpayers to reclaim money linked to tax complications from the pandemic. Many Americans may not realize they are eligible for refunds or reductions in penalties due to the unique circumstances of the COVID-19 federal disaster period.
During this time, which lasted from January 20, 2020, to May 11, 2023, tens of millions of Americans might find themselves owed refunds. Erin M. Collins, the National Taxpayer Advocate, emphasized that “tens of millions of Americans may be owed refunds or reductions of penalties and interest by the IRS.” This situation arises particularly for those who faced penalties for late filings or payments during this period.
Taxpayers can qualify for these refunds if they were assessed penalties for failing to file timely returns or pay taxes during the COVID federal disaster period. In fiscal year 2022 alone, the IRS levied more than 12 million estimated-tax penalties and over 16 million failure-to-pay penalties. The total penalties assessed reached around $12 billion.
However, many people remain unaware of their eligibility due to insufficient publicity from the IRS. Collins pointed out that “the IRS should not have assessed penalties for late filing or payment during that period,” suggesting that taxpayers who paid such penalties might now qualify for refunds.
To take advantage of this opportunity, individuals need to act before the deadline. They should review their tax records from 2020 to 2023 and look for any penalties or interest charges incurred during the pandemic. If unsure about their eligibility, consulting a tax professional can provide clarity.
Steps to claim potential refunds:
- Review your tax records from 2020 to 2023.
- Identify any penalties or interest charges related to late filings or payments.
- Consult with a tax professional if you are uncertain about your situation.
- File Form 843 by paper mail as early as possible since electronic filing is not available.
The Department of Justice is expected to appeal the Kwong decision, which clarified that tax deadlines might have been legally postponed throughout the COVID emergency period. This leaves some uncertainties regarding how these changes will affect future filings and claims.
As July 10, 2026, approaches, taxpayers must take action themselves—those who have incurred penalties during the COVID years should consider filing claims soon to avoid missing out on potential refunds.
