Finding a stray $20 bill in your winter coat pocket is a top-tier feeling, but imagine finding a few thousand dollars from the federal government instead.
New Yorkers are finally getting some massive news regarding an IRS pandemic refund that has been flying under the radar.
While most of us thought the era of COVID-era checks was long gone, a major legal shakeup in the courts has just opened the door for millions of taxpayers to claim money they were overcharged years ago.
This whole situation boils down to a quiet but powerful ruling in the case of Kwong v. United States, where the U.S. Court of Federal Claims decided that the pandemic legally counted as a “federally declared disaster” under Internal Revenue Code Section 7508A(d).
Because of this specific designation, the IRS was technically supposed to “pause the clock” on tax deadlines for several years.
This means those annoying late fees, interest charges, and failure-to-file penalties you might have paid during the height of the pandemic were likely assessed without the proper authority.
Millions of Americans are now realizing they were charged fees they didn’t actually owe, and the money is finally starting to flow back to the people.
What exactly is the IRS pandemic refund?
It is basically a massive correction for anyone who was hit with IRS penalties between early 2020 and mid-2023.
The courts recently backed up the idea that tax deadlines were automatically suspended during the disaster period, building on previous wins like the Abdo v. Commissioner decision.
Now, taxpayers who were penalized during that window have a legal right to ask for that money back.
Who is eligible for the money?
You are likely eligible for this IRS pandemic refund if you were charged penalties or interest by the IRS between January 20, 2020, and July 10, 2023, according to USA Today.
This applies to both individuals and small business owners in New York who had a tough time keeping up with payments while the city was shut down. If you settled an old tax debt or finally caught up on your 2021 or 2022 filings during that time, you definitely want to check your records for any penalty charges.
How to claim your refund
The IRS is not exactly going to knock on your door and hand you a bag of cash, so you have to do a little bit of legwork.
- Get your transcripts: Log into your official IRS Online Account and pull your “Tax Account Transcript” for the years 2020, 2021, and 2022.
- Look for penalty codes: You are searching for any transactions labeled as “penalty” or “interest” that happened during the disaster window.
- File Form 843: This is the magic piece of paper. Most experts are recommending that taxpayers file a “protective claim” using IRS Form 843 to make sure they get their spot in line before the deadline hits.
The deadline you can’t miss
You need to move fast because the window for these claims is closing. The industry-wide target date to preserve your right to a refund is July 10, 2026.
Even if the IRS appeals the court decision later on, filing your claim now acts like a “placeholder” to ensure you don’t get locked out of your money.
This is a totally separate situation from the New York State inflation refund checks we could see in the near future. While those would be a one-time gift from the state, this new IRS refund is about getting back money that was rightfully yours to begin with.
If you are still getting your papers in order for this year, make sure to check out our full guide to Tax Day 2026 in NYC so you don’t end up owing even more.