A major tax refund alert has been issued by the Internal Revenue Service (IRS), and it could mean nearly $3,000 in the hands of eligible taxpayers starting as early as May 21, 2025. This development comes as the IRS processes unclaimed refunds from prior tax years and distributes payouts tied to specific credits and corrections.
If you’re one of the millions of Americans who may have missed out on a tax refund from the 2020 tax year, or are eligible for adjustments, this could be your last chance to claim your money. Here’s a breakdown of what’s happening, who qualifies, and how to claim your refund.
Why Is the IRS Issuing These Refunds Now?
The refunds being issued beginning May 21 stem from unclaimed tax returns and retroactive adjustments related to the pandemic-era 2020 tax year. Due to disruptions caused by COVID-19 and widespread confusion over filing rules, an estimated $1 billion in unclaimed refunds has been sitting with the IRS — and the window to claim it is rapidly closing.
The IRS typically gives taxpayers three years to file and claim a refund on an unfiled return. This year, May 17, 2024, was the filing deadline for claiming 2020 refunds — but taxpayers who filed in time are now seeing the processing and distribution phase, with refunds hitting bank accounts and mailboxes starting May 21.
How Much Money Could You Receive?
According to IRS estimates, the median refund amount is close to $932, but many Americans could receive up to $2,980 depending on factors like:
- Total income in 2020
- Whether taxes were overpaid
- Eligibility for refundable tax credits (e.g., Earned Income Tax Credit or EITC)
- Withheld taxes that were never reclaimed
Those who qualified for the Earned Income Tax Credit, especially low-to-moderate-income families and individuals with children, are expected to receive some of the largest payouts, with totals near or exceeding the $3,000 mark.
Who Is Eligible for the Refund?
To be eligible for the May 21 refund payout:
- You must have filed your 2020 tax return before the May 17, 2024 deadline.
- You did not previously file or claim a refund for 2020.
- You had federal income taxes withheld or qualify for refundable credits.
- You have no outstanding federal debts that would offset your refund (such as unpaid child support, federal student loans, or other federal obligations).
The IRS will automatically process refunds for eligible taxpayers who filed in time. If you did not file a return for 2020 by the deadline, you are unfortunately no longer eligible for the refund.
When and How Will You Receive Your Refund?
The IRS has announced that direct deposits for qualifying individuals will begin as early as May 21, while paper checks may take up to three weeks to arrive depending on mailing time and address verification.
To check the status of your refund, you can use the “Where’s My Refund?” tool on the IRS website, which will be updated as refunds are issued. You’ll need your:
- Social Security number (or ITIN)
- Filing status
- Exact refund amount
Those who opted for direct deposit on their returns will receive their payments much faster than those receiving paper checks.
Common Reasons You Might Not Receive the Refund
Not everyone who expects a refund will receive one. The most common reasons refunds are withheld or delayed include:
- Missing or inaccurate tax return information
- Incorrect bank account or mailing address
- Outstanding federal or state debts
- IRS needing additional time to verify identity or income
If you believe you’re entitled to a refund but have not received it within four weeks of May 21, the IRS recommends contacting their hotline or scheduling an appointment at a local IRS office for help.
IRS Urges Taxpayers to Stay Alert for Scams
As refund season continues, the IRS has also issued a warning about the rise in tax refund-related scams. Fraudsters often target individuals expecting refunds by sending phishing emails, texts, or fake calls claiming to be from the IRS.
Important reminder: The IRS will never call or email you to ask for personal banking or identity information. If you receive any suspicious communication about your refund, report it directly to the IRS or visit irs.gov/phishing for more guidance.
What If You Missed the Deadline?
If you did not file your 2020 tax return by May 17, 2024, the chance to claim a refund has passed. However, the IRS still encourages you to file overdue tax returns to remain in good standing and avoid penalties for future years.
You can also review your filing history through your IRS online account, which provides digital access to prior-year tax documents, transcript records, and refund notices.
Final Thoughts
This tax refund alert is good news for many Americans still recovering from the financial aftermath of the pandemic. With nearly $3,000 potentially available, those who filed in time could see a much-needed boost starting May 21.
Whether it’s to cover bills, pay off debt, or add to savings, this is one refund season you won’t want to miss. Make sure your banking information is up to date, and be vigilant for fraud as payments roll out in the coming weeks.
