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Refund

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Dictionary Says

Definition of 'Refund'

A payment from the government for an individual's overpaid taxes. An individual in this situation is said to be "over-withholding". Federal income tax refunds are not taxable.
Investopedia Says

Investopedia explains 'Refund'

A refund occurs when the government owes some of the taxes you paid throughout the year.

Related Definitions

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    Direct Tax

    A tax that is paid directly by an individual or organization to the imposing entity. A taxpayer pays a direct tax to a government for different purposes, including real property tax, ...
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  • Earned Income Credit - EIC

    A tax credit for low-income workers. Even workers whose incomes are too small to have paid taxes can get EIC.
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  • Income Tax

    A tax that governments impose on financial income generated by all entities within their jurisdiction. By law, businesses and individuals must file an income tax return every year to ...
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    • Refundable Credit

      A tax credit that is not limited by the amount of an individual's tax liability. Typically a tax credit only reduces an individual's tax liability to zero. Refundable credits go beyond ...
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    • Withholding Tax

      1. Income tax withheld from employees' wages and paid directly to the government by the employer.2. A tax levied on income (interest and dividends) from securities owned by a non-resident.
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    • Direct Deposit

      Electronic funds that are deposited directly into your bank account rather than through a paper check. Common uses of a direct deposit include income tax refunds and pay checks.
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