What If I Didn’t File Taxes in 2020?
Filing a late 2020 tax return can resolve your status with the IRS and may allow you to claim a refund or missed pandemic-era financial relief.
Failing to file a required federal income tax return is a situation that can be rectified. The year 2020 was unique due to the global pandemic, which introduced a range of financial changes and relief measures. Addressing an unfiled 2020 return is necessary to prevent negative financial consequences and ensure you are in good standing with the IRS.
Potential Consequences of Not Filing
When a required tax return is not filed on time, the Internal Revenue Service (IRS) can assess penalties if you owe taxes. The Failure to File penalty is 5% of the unpaid taxes for each month or part of a month that a return is late. This penalty starts the day after the tax filing deadline and can reach a maximum of 25% of your unpaid tax bill.
A separate Failure to Pay penalty of 0.5% of the unpaid taxes may also apply for each month the taxes remain unpaid, also capping at 25%. If both penalties are applied in the same month, the Failure to File portion is reduced by the Failure to Pay amount. Beyond these penalties, interest will accrue on the unpaid tax and the penalties from the due date until the balance is paid in full.
If you do not file a return, the IRS may create a Substitute for Return (SFR). This return might not include all the deductions and credits you are entitled to, potentially resulting in a higher tax liability. The IRS will then send a notice of deficiency, and if you do not respond by filing your own return, the agency can begin collection actions like levying wages or bank accounts.
Missed Refunds and Pandemic-Related Credits
The deadline to claim a tax refund for the 2020 tax year closed on May 17, 2024, after the standard three-year window expired. It is no longer possible to claim any refund you may have been owed from tax withholding or from refundable tax credits for 2020.
This includes several pandemic-related relief measures, such as the Recovery Rebate Credit for missed stimulus payments. Other credits like the Earned Income Tax Credit (EITC) and the Child Tax Credit for the 2020 tax year are also no longer claimable. Any refund not claimed by the deadline now belongs to the U.S. Treasury.
Information Needed to File Your 2020 Return
To complete your 2020 tax return, you must gather your financial documents from that year. This includes forms reporting income, such as a Form W-2 from an employer or various 1099 forms. Common examples are the 1099-NEC for contractor work, 1099-MISC for other income, and 1099-G for government payments like unemployment compensation.
If you are missing income documents, you can request a free Wage and Income Transcript from the IRS. This transcript shows data from all information returns the IRS has received that are associated with your Social Security number. You can request a transcript online through the IRS “Get Transcript” service for immediate access or by mailing Form 4506-T, which takes five to ten calendar days.
You will also need records for any deductions you plan to claim, as these can lower any tax you might owe. This could include receipts for charitable contributions, records of medical expenses, or Form 1098-T for tuition payments.
How to File a Late 2020 Tax Return
After gathering your documents, you can complete and file the return. Tax returns for prior years like 2020 cannot be filed electronically and must be prepared on paper and mailed to the IRS. You must use the specific tax forms for the 2020 tax year, not current-year forms.
You can find the 2020 versions of Form 1040 and its schedules on the IRS website in the “Prior Year Forms & Instructions” section. After filling out the forms, you must sign and date the return. If filing a joint return, both spouses must sign.
The mailing address for your paper return depends on your state and whether you are including a payment. The instructions for the 2020 Form 1040 list the correct IRS service center addresses.
If you owe taxes, you should include payment to stop further penalties and interest from accruing. You can pay through IRS Direct Pay, with a debit or credit card, or by mailing a check or money order. Even if you cannot pay the full amount, you should still file the return and explore payment options, like an installment agreement with the IRS.