History of Tax refund in Timeline

A tax refund occurs when a taxpayer has remitted more in taxes throughout the year than their actual tax liability. This overpayment results in the government returning the excess amount to the taxpayer. Refunds can arise from various situations, such as over-withholding from wages, claiming eligible deductions or credits, or miscalculating estimated tax payments. Taxpayers typically receive refunds after filing their annual tax return and the tax authority determines that an overpayment has been made. The refund represents the difference between the amount paid and the amount owed.

1944: Central Excises Act 1944

In 1944, Section 11 B of the Central Excises Act 1944 was established, providing provisions for refund of duty in indirect taxation.

1994: Finance Act 1994

The Central Excises Act 1944, which also applies to Service Tax as defined in the Finance Act 1994.

1996: U.S. Federal Law in 1996

In 1996, a U.S. federal law was signed containing a provision that required the federal government to make electronic payments by 1999.

1999: Electronic Payments Mandate by 1999

A U.S. federal law signed in 1996 mandated that the federal government make electronic payments by 1999.

2004: Tax Returns in 2004

In 2004, the Internal Revenue Service reported that 77% of filed tax returns resulted in a refund check, averaging $2,100.

2006: Splitting Tax Refunds in 2006

As of 2006, tax filers could split their tax refund with direct deposit in up to three separate accounts with three different financial institutions.

2008: Direct Express Debit MasterCard in 2008

In 2008, the U.S. Treasury Department partnered with Comerica Bank to offer the Direct Express Debit MasterCard prepaid debit card for federal benefit recipients without bank accounts.

2011: Average Tax Refund in 2011

In 2011, the average tax refund was $2,913.

2017: Average Tax Refund in 2017

For the 2017 tax year, the average refund was $2,035.

2018: Average Tax Refund in 2018

In 2018, the average tax refund was $1,865, which was 8% less than the previous year, reflecting changes to the tax code.

2022: IRS Tax Refund Data in 2022

In 2022, the total tax refund amount was $23.5 billion more than in 2023, with an average refund of $297 more per person than the following tax season.