NewsNation recently ran a story about a "potential COVID tax refund," which caught the attention of many members of the Austin Chinese community. Many people naturally ask: "The pandemic ended so long ago — why is there still talk of refunds now?" Let's clarify first: this round of news does not actually involve relief payments or unemployment benefits. It concerns refund claims for late-filing and late-payment penalties and interest charged by the IRS during the pandemic — arising from the Court of Federal Claims case Kwong v. United States, with a filing deadline of July 10, 2026. As an Austin-based Chinese CPA firm deeply rooted in the local community, we want to walk you through these different types of "COVID refunds" today.
Editor's Note (updated July 16, 2026): This article was originally published on July 5, 2026. The filing deadline for refund claims related to the Kwong case discussed below expired on July 10, 2026, and the IRS's appeal is still ongoing. The earlier version of this article treated the 2021 unemployment income tax exclusion and the Recovery Rebate Credit as options still available to claim; after verification, both of those windows have since closed, and the text below has been corrected accordingly.
What Is the COVID Tax Refund?
The opportunity that is genuinely related to a "COVID tax refund" — and that still had an active filing window in 2026 — comes from the Kwong v. United States case. In November 2025, the Court of Federal Claims ruled that under Section 7508A(d) of the Internal Revenue Code, the national disaster declaration for COVID-19 automatically extended certain tax deadlines falling between January 20, 2020, and July 10, 2023, including deadlines for claiming refunds of penalties and interest. Based on this ruling, taxpayers who were charged IRS penalties and interest during the pandemic due to late-filed returns or late tax payments were able to submit Form 843 (noting "Kwong v. United States" at the top of the form) as a protective refund claim before July 10, 2026. Because the IRS has appealed the ruling, whether these claims ultimately result in a refund depends on the outcome of that appeal — the purpose of filing before the deadline was simply to preserve one's rights before the appeal is decided.
Pandemic Tax Refunds That Are Now History: Unemployment Income Exclusion and Recovery Rebate Credit
The two types of "pandemic refunds" that people remember most vividly are now both a thing of the past. The first is the unemployment income tax exclusion: the American Rescue Plan allowed taxpayers with a 2020 adjusted gross income (AGI) below $150,000 to exclude up to $10,200 of unemployment compensation from tax ($20,400 for married couples). The second is the Recovery Rebate Credit: people who did not receive the full amount of their stimulus payments could claim the difference on their 2020 or 2021 tax returns. However, both of these filing windows have now closed — the deadline for 2020 refund claims was May 17, 2024, and the deadline for 2021 claims was April 15, 2025, with no exceptions or extensions. If you missed these deadlines, it is no longer possible to recover this money by filing a late return or an amended return (Form 1040-X). For basic information on the filing process, please see our Chinese Tax Filing Guide.
What Should Austin Chinese Tax Clients Pay Attention To?
For members of the Chinese community living in Austin, circumstances related to the Kwong case are actually quite common. During the pandemic, many people experienced income disruptions, extended stays in China, or transitions from W-2 employment to 1099 independent contractor status, all of which frequently led to late-filed returns or late tax payments — and the resulting penalties and interest. If you recall paying such amounts to the IRS during those years, you may be part of the group affected by this round of refund claims.
In addition, many Chinese families have "mixed status" households, where one spouse is a U.S. tax resident and the other is a nonresident. In these situations, reviewing historical filing records and preparing refund claims requires a more careful strategy. Without a solid understanding of tax law, it is easy to make mistakes when sorting through these records. This is why many clients choose to work with an experienced Austin Chinese CPA to help handle these complex tax issues.
Don't Overlook the Impact of Foreign Accounts
While reviewing your tax records from the pandemic years, we also want to remind you not to overlook compliance requirements. Reporting requirements for foreign assets and accounts were not relaxed during the pandemic. If you hold bank accounts or financial assets overseas that exceed certain thresholds, you must file the FBAR (Foreign Bank and Financial Accounts Report) on time. When submitting refund claims or reviewing historical records, the IRS typically scrutinizes accounts more closely. If you are unsure whether your foreign accounts need to be reported, we recommend reviewing our FBAR Filing Guide to make sure that, while asserting your rights, you don't end up incurring penalties for compliance issues.
YZ CPA Note
YZ CPA would like to remind everyone that tax rights come with a "statute of limitations." The deadline for filing a protective claim related to the Kwong case (July 10, 2026) has already passed. If you submitted Form 843 before the deadline, please keep your proof of submission safe and wait patiently for the outcome of the appeal. If you did not manage to file in time, please do not send in materials on your own — we recommend having an accountant review your specific case (the timing, amount, and tax period of the penalties paid) before deciding whether other options may be available. In the meantime, we suggest locating your 2020 and 2021 tax records and verifying your filing and payment history for those years, so you are prepared for any possible next steps. For more tax knowledge, we invite you to read our Tax Insights column.
In short, although the pandemic itself is over, some of its tax-related loose ends may not yet be fully resolved. Taking the time to review your historical tax situation — and understanding which rights remain available and which windows have already closed — is the best way to recover what you're owed within the rules that still apply.
If you need professional tax assistance, please visit our YZ CPA Services page or contact us.