Are you one of the 1.6 million who qualify for an IRS refund in September? What to know
Taxpayers who filed their 2019 or 2020 returns late have the opportunity to get penalty fees waived or refunded.
The IRS is doling out more than $1.2 billion worth of tax refunds and credits to help people who are still struggling from the COVID-19 pandemic, according to an Aug. 24 news release. The refunds will affect more than 1.6 million taxpayers and are expected to be mostly distributed by the end of September.
Qualifying taxpayers who filed their returns late in 2019 and 2020 will see an automatic refund or credit applied to any penalties they have already paid. Some businesses and employers will also qualify for relief.
Taxpayers who have still not filed 2019 or 2020 returns must submit their returns by Sept. 30 to qualify for the relief.
The relief is also expected to help the IRS devote more of its resources to catching up on its backlog of returns and taxpayer correspondence, the release says.
“Throughout the pandemic, the IRS has worked hard to support the nation and provide relief to people in many different ways,” IRS Commissioner Chuck Rettig said in the release. “The penalty relief issued today is yet another way the agency is supporting people during this unprecedented time.”
Here’s everything you need to know about getting your refund.
Are you eligible for a refund?
Refunds apply to taxpayers who submit 1040 forms, 1041 forms, 1120 forms, 1066 forms, 990-T forms and 990-PF forms by the end of the month. Those are for individual returns, estate and trust returns, corporate returns and more, the IRS says.
Some small businesses, employers and other businesses are also eligible, including those that file returns in the 1099 series. Eligibility for this relief will be determined by timely filing. For 2019 returns, businesses must have filed by Aug. 3, 2020. For 2020 returns, businesses must have filed by Aug. 2, 2021.
The impending relief applies to the failure to file penalty, which is typically a rate of 5% per month, up to 25% of the unpaid tax when a federal return is filed late.
Which returns do not qualify
Some situations are not eligible for relief. These cases include fraudulent returns, if penalties are included in an accepted compromise or closing agreement, or if the the penalties were determined by a court.
The failure to pay penalty is also ineligible, but taxpayers can use existing penalty relief procedures for anything that does not qualify, according to the IRS.
More information about penalties that are and are not eligible can be found under Notice 2022-36. More information about existing penalty relief procedure can be found on the IRS’ penalty relief page.
How to get your refund
Refunds will be automatically distributed, and most are expected to reach taxpayers by the end of September, the IRS says.
“For people or businesses who qualify ... there’s no need to call,” Rettig said.
If you have not yet filed your 2019 or 2020 return, you must do so by Sept. 30 to qualify for and receive your relief.
This story was originally published September 14, 2022 at 10:11 AM with the headline "Are you one of the 1.6 million who qualify for an IRS refund in September? What to know."
