Recently, an important piece of tax news drew widespread attention in the Chinese community: the filing deadline for a specific COVID-era tax refund was July 10, 2026, and that deadline has now passed. For Chinese residents and new immigrants in Austin, this is more than just a date on the news calendar — it could involve hundreds or even thousands of dollars. As a Chinese-American accounting firm deeply rooted in the Austin market, we want to take this opportunity to explain in detail what this deadline actually means, exactly which money is involved, and what you can still do now that the deadline has passed.
Editor's Note (Updated July 16, 2026): This article was originally published on July 11, 2026, and mistakenly described this refund as the Recovery Rebate Credit, stating the deadline was "today." In fact, the July 10 deadline relates to claims for refunds of pandemic-related penalties and interest (Form 843) under Kwong v. United States, and that deadline expired on July 10, 2026, with an IRS appeal still pending. The Recovery Rebate Credit claim windows closed separately and much earlier, on May 17, 2024, and April 15, 2025. The text below has been corrected.
What Is the COVID Tax Refund?
Many people wonder: "Wasn't the pandemic a long time ago? Why are we still talking about tax refunds now?" The refund in question is not, as many assume, a repeat payout of the Recovery Rebate Credit. Rather, it is a claim for the refund of failure-to-file penalties, failure-to-pay penalties, and related interest that the IRS assessed during the pandemic. In November 2025, in Kwong v. United States, the Court of Federal Claims held that under Internal Revenue Code Section 7508A(d), the national disaster declaration for COVID-19 automatically extended certain tax deadlines from January 20, 2020 through July 10, 2023 — including the deadline for claiming refunds of penalties and interest. Based on this ruling, eligible taxpayers could file Form 843 (noting "Kwong v. United States" at the top of the form) as a protective claim by July 10, 2026. Because the IRS has appealed the ruling, whether these refunds will actually be paid out depends on the final decision.
It's important to distinguish this from the Recovery Rebate Credit (economic stimulus payments): if you did not receive the full stimulus payment in 2020 or 2021, you could have claimed the difference by filing a tax return, but those two windows closed on May 17, 2024, and April 15, 2025, respectively, with no exceptions or extensions — that opportunity is no longer available.
Who Is Most Likely to Be Affected?
Among our "Chinese Austinites filing taxes" client base, several groups are most closely connected to this penalty and interest refund claim. First are small business owners whose businesses were hit hard during the pandemic — facing tight cash flow, they paid taxes late and were assessed penalties and interest by the IRS. Second are international students and new immigrants who had just arrived in the U.S. at the time — unfamiliar with the U.S. tax system, they missed filing or payment deadlines and simply accepted the resulting penalties. There are also those who were living overseas and, due to travel restrictions and mail delays, submitted their documents late.
If you're not sure whether you fall into one of these groups, we recommend reviewing your bank statements and IRS correspondence from that period, or logging into your IRS online account to check your payment history. If you find that you did pay penalties or interest to the IRS during the pandemic, then you are part of the target group for this refund claim. You can visit our Tax Insights column to learn more about how to review your historical tax records.
What Happens If You Missed the Deadline?
This is exactly why the July 10 deadline mattered so much. Taxpayers who filed a protective claim (Form 843) before the deadline preserve their rights regardless of when the appeal is ultimately decided, while those who did not file may be unable to benefit even if the courts ultimately rule in taxpayers' favor, simply because they missed the deadline. Given the rising cost of living in Austin, no refundable penalty or interest amount should be given up lightly.
What Can You Still Do Now That the Deadline Has Passed?
If you already filed a protective claim before July 10, 2026, here's what to do next: keep your submission records and receipts safe, follow the progress of the Kwong case appeal, and keep your IRS account information — especially your mailing address — up to date so you can receive future notices.
If you missed the deadline, please don't submit materials on your own just yet. We recommend working with a professional accountant to review the specifics of your case — when the penalties were paid, the amounts involved, and the tax periods they cover — before determining whether any other options may be available. This is also a good opportunity to review your tax filings from recent years to make sure no other refunds still within the three-year claim window have been overlooked. If you held overseas assets or accounts during the pandemic, be sure to check your compliance status and confirm you haven't run afoul of the FBAR Filing Guide — don't let a small oversight cost you dearly. For those unfamiliar with U.S. tax law, our Tax Filing Guide for Chinese Taxpayers can help you sort things out, but the safest approach is always to seek help from a professional accountant.
YZ CPA Note
Now that this deadline has passed, YZ CPA recommends staying calm and responding rationally. First, confirm whether you paid any failure-to-file or failure-to-pay penalties and interest during the pandemic. Second, if you already filed a protective claim, hold onto your documentation and wait for the outcome of the appeal. Finally, whether or not this particular deadline applies to you, remember that tax rights are time-sensitive — the next time a limited-time refund or credit opportunity comes along, assess your eligibility and act right away to make sure your rights are fully protected.
For professional tax assistance, please visit the YZ CPA Services page or contact us.