COVID Tax Refunds: Who Might Still Qualify, What The Kwong Ruling Means, And Your Options Now

COVID Tax Refunds: If you’re searching for how to claim a COVID tax refund right now, there’s something important to know first: for most taxpayers, the main filing deadline was July 10, 2026, and that date has already come and gone. This refund opportunity stems from a real, significant federal court ruling, Kwong v. United States, decided in November 2025, which found that IRS filing and payment deadlines were automatically postponed for the entire COVID-19 disaster period, potentially making millions of penalty and interest charges the IRS collected between 2020 and 2023 improperly assessed. But the window to protect your claim under the standard three-year rule has now closed for most people.

Here’s the part that hasn’t been widely reported yet: not everyone is actually out of time. Depending on when you specifically paid the penalty or interest in question, a separate, less-publicized two-year rule may still apply, potentially giving some taxpayers a window well past July 10. If you paid a COVID-era penalty or interest charge more recently, within roughly the last two years, you may still be able to file a claim today. This guide breaks down exactly who’s already too late, who might still qualify, and what the current, accurate status of this refund opportunity actually is.

COVID Tax Refund (Kwong Ruling) Key Facts and Dates

What the Kwong Ruling Actually Found

To understand this refund opportunity, it helps to know exactly what the court decided. Under IRC Section 7508A(d), as it existed at the time, federal tax filing and payment deadlines are automatically postponed for the duration of a federally declared disaster, plus an additional 60 days. The COVID-19 disaster declaration ran from January 20, 2020, through May 11, 2023, and adding that 60-day buffer pushes the legally postponed deadline out to July 10, 2023.

In Kwong v. United States, the U.S. Court of Federal Claims agreed with this reading of the law, essentially finding that tax returns and payments due anywhere within that roughly 3.5-year window were not actually late, even if the IRS treated them that way at the time. If that reasoning holds up, it means the IRS improperly charged late-filing penalties, late-payment penalties, and interest on a huge volume of returns and payments during that period, and affected taxpayers may be entitled to get that money back.

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Why the July 10 Deadline Already Passed for Most People

Refund claims with the IRS are generally governed by a strict statute of limitations: you typically must file within three years of your original filing deadline, or two years from the date you paid the tax, penalty, or interest in question, whichever period ends later. Because the Kwong ruling treats July 10, 2023 as the effective, postponed due date for returns and payments across that entire disaster window, the standard three-year clock from that date runs out on July 10, 2026. For the large majority of affected taxpayers, that was the hard deadline to file a protective claim, and it has now passed.

This means if you’re only now learning about this opportunity and you paid your COVID-era penalties or interest back in, say, 2021 or 2022, the standard three-year path is very likely already closed. Missing this deadline generally means permanently forfeiting the ability to recover a refund tied to this specific ruling, even if Kwong is ultimately upheld on appeal.

Who Might Still Have a Window: The Two-Year Rule

This is the detail that deserves far more attention than it’s gotten. The three-year rule isn’t the only path to a refund claim. If a taxpayer’s penalty or interest payment was actually made more recently, the alternative two-years-from-the-date-of-payment rule can apply instead, and because that rule counts forward from your actual payment date rather than a fixed calendar deadline, it can extend well beyond July 10, 2026 for some people.

Here’s a concrete example that illustrates the difference: if you filed a 2021 return on time but didn’t actually pay an associated penalty and interest charge until, say, July 2025, your two-year window would run until July 2027, later than the general July 10, 2026 cutoff, meaning that later date would apply to your specific claim instead. In short, your personal deadline depends on exactly when you paid, not just when the underlying tax year or return was due, so it’s genuinely worth checking your own payment history before assuming you’re out of time.

The Case Is Still Under Appeal, and Refunds Aren’t Being Issued Yet

It’s worth being clear-eyed about where things actually stand. The federal government is appealing the Kwong decision, and Treasury officials, including Assistant Secretary Ken Kies, have publicly stated the administration believes the ruling was “wrongly decided.” The IRS is not currently issuing any refunds tied to this ruling, and the legal process is widely expected to take years to fully resolve through the appellate courts. Filing a claim now doesn’t guarantee you’ll ever receive money, it simply preserves your right to a refund if the ruling is ultimately upheld. Tax professionals refer to this kind of submission as a protective claim, precisely because its purpose is protecting your legal position while the underlying legal question remains unsettled.

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What Actually Qualifies for a Refund Under This Ruling

If you had a tax return or payment originally due between January 20, 2020, and July 10, 2023, and the IRS charged you any of the following, you may have grounds for a claim: failure-to-file penalties, failure-to-pay penalties, estimated tax penalties, or interest charged on amounts the IRS treated as late during that window. Some tax professionals also note this ruling could potentially help taxpayers who never received an Economic Impact Payment (EIP), the formal name for pandemic-era stimulus checks, though that application is more complex and less directly established than the core penalty and interest claims.

Not every COVID-era charge automatically qualifies. Penalties tied to certain other filings, such as FBAR reporting under Title 31 rather than the Internal Revenue Code, generally fall outside the Kwong ruling’s reasoning entirely, and international information return penalties, like those tied to Forms 5471, 3520, or 8938, involve more complex analysis that typically benefits from professional review before filing.

How to File a Protective Claim (If You’re Still Within Your Window)

If you believe your specific payment date puts you within the two-year alternative window, the process runs through IRS Form 843, Claim for Refund and Request for Abatement. Tax professionals generally recommend clearly labeling the submission, writing something like “Protective Refund Claim Relating to Kwong v. United States” across the top of the form, so it gets properly routed and recognized by IRS staff reviewing these claims. The form should identify the specific tax year, the type of penalty or interest involved, and the amount paid, along with a brief written statement citing the Kwong decision as the basis for the claim.

Before filing, it’s worth pulling your IRS tax transcripts for the relevant years directly through your IRS Online Account at IRS.gov, which will show the specific penalty and interest amounts the agency actually assessed and collected, information you’ll need to accurately complete the form.

FAQs COVID Tax Refunds 2026

Conclusion

The reality of the COVID tax refund opportunity tied to the Kwong v. United States ruling is more nuanced than a single deadline headline suggests. For most taxpayers, the standard three-year filing window closed on July 10, 2026, and that opportunity is gone. But because refund deadlines can also run two years from your actual payment date, taxpayers who paid COVID-era penalties or interest more recently may still have a genuine, if narrower, path to file a protective claim today. The underlying case also remains under appeal, so even a successfully filed claim doesn’t guarantee eventual payment, it simply keeps your position preserved while the legal question works through the courts. If you’re unsure where you stand, checking your IRS transcripts for your exact payment dates is the fastest way to find out whether you still have time. This article will continue to be reviewed and updated monthly as the Kwong appeal and any related IRS guidance develop.

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