Many New Yorkers Qualify for a COVID-Era IRS Refund

If you paid IRS penalties or interest during the COVID-19 pandemic, you may want to take a closer look at your tax records.

Some New Yorkers could be eligible for a refund, but there's one big catch: you have to file a claim by July 10 to preserve your rights.

Why Are People Getting a Refund?

The potential refunds stem from a federal court case called Kwong v. United States.

The court ruled that because many federal tax deadlines were extended during the COVID-19 emergency, the IRS may have started charging certain penalties and interest too early. The federal government is appealing that decision, so nothing is guaranteed yet, but tax experts say eligible taxpayers should still file a claim before the deadline. If you miss it, you could permanently lose the chance to receive a refund if the ruling ultimately stands.

Who Could Qualify?

According to the Independent National Taxpayer Advocate, you may want to file a claim if you:

Paid IRS penalties or interest during the COVID disaster period.
Still owe penalties or interest from that time.
Were charged late-filing or late-payment penalties.
Filed certain international information returns late.
Missed out on a tax refund, refundable credit, withholding credit, estimated tax payment credit or another tax benefit for tax years affected by the pandemic.

The disaster period generally covers January 20, 2020, through May 11, 2023, although some affected tax years may extend through July 10, 2023, for filing purposes.

Some taxpayers may also still be able to claim refunds or credits for tax years 2019 through 2022.

How Much Could You Get?

There's no set refund amount.

The amount depends on your individual tax situation and how much you paid in penalties or interest. Some tax experts believe the refunds could be significant for certain taxpayers, but the IRS will review each claim individually.

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It's also important to know that filing a claim does not guarantee you'll receive money. The IRS could approve it, deny it or wait until the court case is resolved.

How to File

The IRS recently made it easier to submit claims by allowing eligible taxpayers to file Form 843 (Claim for Refund and Request for Abatement) electronically through an IRS online account.

If you'd rather file by mail, you can still submit a paper Form 843. Tax experts recommend writing "Kwong v. United States" across the top of the form so it's properly identified.

Many tax professionals also recommend filing what's known as a protective claim. This preserves your right to a potential refund while the court case continues, even if a final decision takes years.

Don't Wait Until the Last Minute

Even though the lawsuit is still working its way through the courts, tax experts say waiting could cost you.

If you think you may qualify, it's worth reviewing your tax records or speaking with a qualified tax professional as soon as possible. Remember, July 10 is the deadline to preserve your right to a potential refund, and once it passes, you may not get another chance.

As always, Lite 98.7 can't provide tax or legal advice. If you're unsure whether you qualify, consult a qualified tax professional who can review your individual situation.