COVID Tax Refund: A little-known court ruling from late 2025 has opened the door for potentially tens of millions of Americans to recover money the IRS charged them in penalties and interest during the COVID-19 pandemic. But there’s a catch that’s causing real urgency right now: to preserve the right to that money, most affected taxpayers must file a claim with the IRS on or before July 10, 2026 — just days away. Here’s exactly what’s going on, who qualifies, and how much is realistically at stake.
Where This COVID Tax Refund Opportunity Comes From?
The potential refunds trace back to Kwong v. United States, a November 2025 ruling from Judge Molly Silfen of the U.S. Court of Federal Claims. The case centers on how the IRS handled tax deadlines during the federally declared COVID-19 disaster period, which ran from January 20, 2020, through May 11, 2023 (with the tax-filing and payment postponement portion of that period running through July 10, 2023).
Federal law generally requires the IRS to automatically postpone certain tax deadlines during a declared disaster. The dispute is over how long that postponement should have lasted. The IRS had applied a narrower interpretation, typically capping pandemic-related relief at about one year. The court in Kwong disagreed, ruling that because the COVID-19 disaster declaration itself lasted roughly 3.5 years, the mandatory postponement of deadlines should have applied for that entire stretch — meaning many penalties and interest charges the IRS assessed for late filing or late payment during that window may have been improperly charged in the first place.
This wasn’t a one-off legal theory. It builds on a 2024 U.S. Tax Court decision, Abdo v. Commissioner, which reached a similar conclusion, and gained additional footing after the Supreme Court’s 2024 decision ending the old Chevron deference doctrine — which had previously required courts to defer to federal agencies’ own interpretations of ambiguous laws. Without that deference, courts have been free to read the disaster-postponement statute on its own terms, and in both Abdo and Kwong, that reading favored taxpayers. Congress added a further piece of support in December 2025, passing the Disaster Related Extension of Deadlines Act, which requires the IRS to treat disaster-related postponements as genuine extensions for refund-lookback purposes.
The Refunds Are Not Guaranteed and Not Automatic
Two things are important to understand before getting your hopes up for COVID Tax Refund. First, the Kwong decision is not yet final. The federal government has indicated it plans to appeal to the U.S. Court of Appeals for the Federal Circuit, and as of this spring, the parties were still working out a stipulated judgment needed before that appeal could formally proceed. Final resolution could take years.
Second and this is the part driving the current deadline panic — even if you were affected, the IRS is not automatically identifying and refunding people. National Taxpayer Advocate Erin M. Collins, an independent watchdog within the IRS, has stressed that relief will not happen automatically, and that most affected taxpayers must proactively file a claim to protect their rights.
Who Might Qualify for COVID Tax Refund?
According to guidance from the Taxpayer Advocate’s office and tax professionals tracking the case, you may be eligible for a COVID Tax Refund or abatement if, between January 20, 2020, and July 10, 2023, you were assessed or paid any of the following:
- Failure-to-file penalties
- Failure-to-pay penalties
- Estimated tax (underpayment) penalties
- Interest that may have started accruing earlier than legally permitted
This isn’t limited to individual taxpayers. Businesses, estates, and trusts can also potentially qualify if they meet the same underlying conditions. Given that the IRS assessed more than 12 million estimated-tax penalties and over 16 million failure-to-pay penalties in fiscal 2022 alone — together totaling more than $12 billion — the pool of potentially affected taxpayers is genuinely enormous, not a narrow or specialized group.
How Much Money Are We Actually Talking About?
There’s no fixed, guaranteed dollar amount here — the COVID Tax Refund depends entirely on how much you personally paid in qualifying penalties and interest during the covered period, and whether the courts ultimately rule in taxpayers’ favor. For a sense of scale, though: under a narrower 2022 IRS relief notice covering a shorter, one-year postponement window, the agency refunded about $1.2 billion in penalties to roughly 1.6 million taxpayers — an average of a bit under $750 per person, though individual amounts varied widely based on what each taxpayer had actually paid.
Tax professionals following the Kwong case say its broader 3.5-year window could reach far more taxpayers, and in many cases larger amounts, than that earlier round of relief.
The July 10 Deadline, Explained
The deadline exists because of how the IRS calculates the standard window for filing a refund claim — generally three years from when a return is treated as filed, plus a 60-day grace period tied to the length of the disaster postponement. Under the reasoning in Kwong, a return that was actually due during the disaster period is treated as having been filed on July 10, 2023 — the day the disaster’s filing-and-payment postponement effectively ended.
Three years from that date lands on July 10, 2026. If you paid the penalties or interest later than that, a separate two-year rule may apply instead, potentially giving you more time — but the safest course for most affected taxpayers is to act before the July 10 date regardless.
How to File a Protective Claim?
The mechanism for preserving your rights is called a protective claim, filed using IRS Form 843, Claim for COVID Tax Refund and Request for Abatement. A few important practical points:
- Form 843 cannot be filed electronically — it must be mailed on paper, and the IRS does not provide confirmation of receipt. Tax professionals recommend sending it by certified mail so you have proof of timely filing.
- Write “Refund Claim Pursuant to Kwong Case” across the top of the form, and check the box indicating a request for abatement or refund of a penalty due to reasonable cause or another allowable reason.
- If penalties or interest touch more than one tax year, a separate Form 843 is generally needed for each year.
- Before filing, review your IRS tax account transcripts for the 2019 through 2022 tax years (available through your IRS online account) to identify exactly which penalties and interest charges were assessed and confirm they fall within the January 2020–July 2023 window.
Given the legal complexity and the paper-only filing requirement, most tax professionals — including the Taxpayer Advocate’s own guidance — recommend working with a qualified tax preparer or attorney if your situation isn’t straightforward, and being cautious about who you trust with sensitive financial information if you do seek outside help.
What Happens After You File?
Filing a protective claim doesn’t guarantee payment — it simply preserves your legal right to a refund while the Kwong case works its way through the appeals process, which could take years to fully resolve. If the ruling is ultimately upheld, taxpayers who filed timely claims would be positioned to receive refunds; if the government’s appeal succeeds instead, no refund would be owed. Either way, tax professionals are unanimous on one point: missing the July 10 deadline risks losing the opportunity permanently, regardless of how the underlying legal question is eventually settled.
COVID Tax Refund – Bottom Line
If you paid IRS penalties or interest anytime between January 2020 and mid-2023, it’s worth pulling your account transcripts now and figuring out whether you might qualify — fro COVID Tax Refund because the July 10, 2026 deadline to file a protective claim is just days away, and there is no automatic process that will catch you if you miss it. Nothing about this is guaranteed money, but for anyone who paid four or five figures in COVID-era penalties, filing a Form 843 protective claim this week costs little and could preserve access to a meaningful refund down the road.
Top Searched Question on COVID Tax Refund
What is the COVID Tax Refund?
The COVID Tax Refund refers to payments being issued by the IRS to certain taxpayers who were eligible for pandemic-related tax credits but did not claim them on their original federal tax returns.
Who is eligible for the COVID Tax Refund?
Generally, you may qualify if you:
Were eligible for the Recovery Rebate Credit or another COVID-related tax benefit.
Filed a qualifying federal tax return.
Did not receive the full amount you were entitled to during the pandemic.
Is everyone in the United States receiving this COVID Tax Refund?
No. Only taxpayers who meet the eligibility requirements and did not receive the full amount of eligible COVID-related tax credits qualify.
Is this a new stimulus check?
No. This is not a new COVID stimulus payment approved by Congress. It relates to previously authorized pandemic-era tax credits that some eligible taxpayers never claimed.
Will the COVID Tax Refund be taxable?
No. Recovery Rebate Credit payments are generally not considered taxable income.
What if I already received all my stimulus payments?
If you already received the full amount you were entitled to, you generally will not receive an additional refund.
