Form 1040 COVID Penalty Refund — File By July 10, 2026

If the IRS charged you penalties or interest on a Form 1040 (individual income tax return) during the COVID-19 disaster period (Jan 20, 2020 – July 10, 2023), you may be eligible for a refund under the Kwong ruling. The deadline to file Form 843 to preserve a claim is July 10, 2026. Refund eligibility is not guaranteed; the Kwong ruling is currently being appealed.

Who qualifies

Form 1040 filers who were assessed any failure-to-file, failure-to-pay, estimated-tax, or interest charges during the COVID-19 federal disaster period may have a claim under the reasoning of Kwong v. United States. The court found that filing and payment deadlines should have been automatically suspended for the entire disaster window — meaning many penalties charged during that window may not have been legally valid. The National Taxpayer Advocate has confirmed that tens of millions of individual taxpayers may be eligible.

  • Your IRS account transcript for tax years 2019, 2020, 2021, or 2022 shows a penalty or interest assessment dated between Jan 20, 2020 and July 10, 2023.
  • The penalty or interest tied to a return that became due (or that you filed late) during the COVID-19 disaster window.
  • You either paid the assessment (refund eligible) or it remains on your account (abatement eligible).

How much could I get back?

Per PenaltyBack's homepage data as of 2026-05-08, the average individual refund being processed is approximately $2,383, though individual outcomes vary substantially based on the size of the original assessment. Some Form 1040 filers may be eligible for a few hundred dollars; others — particularly those with multiple late years inside the disaster window — may be eligible for several thousand. Refund eligibility and amounts cannot be guaranteed.

Why this specifically

Form 1040 is the most common federal return, which means individual taxpayers represent the largest population potentially affected by Kwong. The National Taxpayer Advocate has explicitly warned that low- and moderate-income filers — who are less likely to have professional tax help — may be the least likely to claim what they may be owed. Filing now (including via a protective claim) preserves a claim regardless of how the appeal turns out.

FAQ

Which tax years are most likely to qualify?

Tax years 2019, 2020, 2021, and 2022 are the most common, because the underlying returns were due (or were assessed late) within the Jan 20, 2020 – July 10, 2023 disaster window. Earlier years can sometimes qualify if a balance was assessed within the window. Your IRS account transcript will show the exact assessment dates.

Do I file one Form 843 per year, or one for everything?

One Form 843 per affected tax year. If you had penalties on both your 2020 and 2021 returns, that's two separate Form 843s, each mailed by certified mail before July 10, 2026. PenaltyBack prepares and mails each one for you.

What if I never paid the penalty — can I still file?

Yes. Form 843 covers both refund claims (for amounts already paid) and abatement claims (for amounts assessed but unpaid). The same July 10, 2026 deadline applies, and the Kwong reasoning is the same in both cases.