A Key Deadline for COVID-Era Tax Refunds Is Approaching. How to Know If You Qualify, and How to Make a Claim

Tens of millions of Americans could receive refunds from the Internal Revenue Service (IRS) for COVID-era interest charges and penalties on late filings or missed payments—if they submit claims by Friday.

A federal judge ruled in November in the case Kwong v. United States that tax filing and payment deadlines should have been postponed for the duration of the COVID-19 disaster declaration plus an added sixty days, a roughly 3.5-year period spanning from Jan. 20, 2020, through July 10, 2023. That could mean taxpayers are entitled to refunds for penalty charges or interest they incurred during that time.

Importantly, it’s not yet certain if those refunds will ever come, or when; the government is currently appealing the judge’s ruling. Assistant Secretary of the Treasury Department Ken Kies said in a May statement to The Associated Press, which reported that the IRS assessed over 120 million penalties during the pandemic timeframe, that the Trump Administration opposed the decision and believed it “was wrongly decided because it is a misreading of the plain language of the statute.”

But despite the ongoing litigation, taxpayers must act now to preserve their eligibility to receive relief if the decision stands. Since the IRS typically requires taxpayers to file a refund claim within three years of submitting a return, Americans have until Friday—three years after July 10, 2023—to make claims for potential refunds on those COVID-era charges.

Here’s what to know about the impending deadline, and how to file a claim—including with a new option the IRS rolled out last week.

Who could be eligible for the refunds?

Anyone who was penalized for not paying their taxes or for filing late tax returns during the disaster declaration period plus 60 days may be eligible for potential refunds or abatements if the judge’s ruling holds. The same is true for those who incurred penalties for filing late foreign information tax forms, such as for international assets, gifts, or trusts.

Taxpayers who were charged interest that began accruing during that period may also be entitled to refunds, in addition to people who overpaid on interest in that timeframe.

All told, that means tens of millions of individual taxpayers, small businesses, large corporations, estates, and trusts could qualify for refund payments.

To check their eligibility, taxpayers can review their federal income transcripts, which include tax payments, penalties, and interest charges.

Those transcripts can be accessed on the IRS website; individual or business accounts can be made using the agency’s ID.me service. You can also request your transcripts via mail, though they could take five to 10 days to arrive—meaning they could come after the deadline to make a claim has already passed.

How to file a claim

If you believe you qualify for a potential refund, you can use what’s known as Form 843, “Claim for Refund and Request for Abatement,” to preserve your eligibility.

The IRS just recently expanded the methods for submitting their COVID-era refund claims on July 1. Now, taxpayers can also submit the form electronically, instead of exclusively on paper.

Form 843 can be accessed through the IRS’s “mobile-friendly forms” web page after logging in through the agency’s ID.me service. After filling it out, taxpayers will have the option to submit it online or print it out for the purpose of filing it through the mail. The current paper version of the form can also be accessed here.

The agency explained that “at this time, only claims on Form 843 related to fully paid interest and penalties that cite to Kwong v. United States are being accepted electronically.” Those who submit their form by paper must also note that the submission is related to the Kwong case at the top of the form, the agency wrote.

National Taxpayer Advocate Erin M. Collins additionally advised in blog posts earlier this year that taxpayers submitting claims to the potential COVID-era refunds should specify that they are filing a “protective claim,” which she explained are used in cases when litigation is pending.

“The claim should clearly state that your claim is based on the COVID-19 disaster relief period and the legal reasoning reflected in Kwong,” Collins wrote. “It should also identify the specific penalties and interest, tax period, and dates at issue.”

You might have to fill out multiple forms to make your claim. Collins added that a form must be filled out for “each tax period and each type of tax” unless otherwise stated in the Form 843 instructions.

If you submit your form—or forms—on paper, Collins suggested doing so by certified mail, which gives proof of mail and delivery, since the IRS does not confirm receipt.