COVID Tax Refund 2026: Who Is Eligible and How to Claim?

A federal court ruling has opened a brief, critical window for taxpayers to potentially recover penalties and interest charged by the IRS during the COVID-19 pandemic. If you faced late-filing or late-payment penalties between January 2020 and July 2023, you might be entitled to a refund.

The deadline to file a "protective claim" is July 10, 2026.

Understanding the Kwong Ruling

The push for these refunds centers on the federal court case Kwong v. United States. The core argument is that under federal law (IRC § 7508A), tax deadlines were automatically suspended during the pandemic-related disaster period.

Because that disaster period lasted until July 10, 2023, the court suggested that penalties assessed by the IRS during that time may have been improper. While the IRS is currently appealing, filing a protective claim by July 10, 2026, is the only way to preserve your legal right to a refund should the ruling be upheld in the future.

Who Is Eligible?

You may be eligible to file a claim if:

• Timeframe: You were assessed or paid failure-to-file, failure-to-pay, or underpayment penalties/interest for tax deadlines falling between January 20, 2020, and July 10, 2023.

• Taxpayer Status: This potentially applies to individuals, small businesses, corporations, estates, and trusts.

• Status: You can seek a refund if you already paid the penalty, or an abatement if the penalty was assessed but remains unpaid.

How to File Your Claim

The IRS is not issuing these refunds automatically. You must take action to "bookmark" your request.

1. Pull Your Transcripts: Access your IRS Online Account to download your tax account transcripts for 2019 through 2022.

2. Prepare Form 843: Use IRS Form 843, Claim for Refund and Request for Abatement.

3. Submit Your Claim:

   • Electronic Filing: Check your IRS account dashboard; the IRS has occasionally enabled electronic submission for specific penalty abatements.

   • By Mail: If filing by paper, write “Kwong vs. United States” at the top of Form 843. Mail it to your designated IRS regional center.

4. Explain the Claim: On Line 8 of the form, explicitly state that your claim is based on the decision in Kwong v. United States and IRC § 7508A.

Frequently Asked Questions

Q: Is this refund guaranteed? A: No. The IRS is currently appealing the Kwong decision. Filing a protective claim keeps your file open so that if the courts eventually rule in favor of taxpayers, your claim is already in the system.

Q: Can I do this myself? A: You can, but because this involves specific legal arguments regarding federal disaster periods, it is highly recommended to have a CPA or tax attorney review your filing to ensure your claim is structured correctly.

Q: What happens if I miss the July 10, 2026, deadline? A: You will likely lose your legal standing to claim a refund for those specific penalties, as the statute of limitations will have expired.

Disclaimer: This information is for educational purposes only and does not constitute financial, legal, or tax advice. Tax laws and court rulings are complex and subject to change. Given the urgency of the July 10, 2026, deadline, please consult with a qualified tax advisor or attorney to review your personal records and determine the appropriate steps for your specific situation. Always verify current instructions and requirements at IRS.gov.