Tax refund

A tax refund is an amount of money paid back to a tax payer if their annual tax payment was more than they should have paid.

Often when the tax liability (amount a tax payer has to pay) is assessed to be more than it should be from an accident then a refund will be sent for the amount that was overpaid.

If a tax payer receives a tax credit that is more than the total tax liability of the tax payer, then a refund will be sent for the amount that could not be taken off of a tax payment. If a tax payer has a liability of $1,000 and receive a tax credit for $1,200 then the liability is -$200 and the government owes the tax payer money. The amount owed to the tax payer will be sent in the form of a tax refund.

See Also

• Tax
• Tax credit