What is the IRS refund and when do you get it?

What is the IRS refund?

The IRS refund is the return of the tax you over-withheld during the year. It is not a prize or a profit: it is your own money, advanced in excess to the State¹.

Through the year your salary is subject to withholding at source: your employer deducts IRS from each payslip and hands it to the tax authority on your behalf. That is only an advance. The figure is settled in the annual IRS return, which works out the tax actually due and compares it with what was already withheld:

• Withhold too much and the State refunds the difference, which is the refund.
• Withhold too little and you pay the top-up in the return.

How is the IRS due worked out?

The refund hinges on one central number: the IRS due for the year. It is worked out in three steps.

1. Taxable income. From the annual gross income you subtract the employment specific deduction, 8.54 × IAS, i.e. €4,587.09 in 2026, unless your Social Security contributions are higher³.
2. Coleta. The IRS brackets (Art. 68.º) apply to the taxable income: each bracket has a rate, and the result is the coleta¹.
3. Deduções à coleta. From the coleta you subtract the tax credits: €600 per dependant (Art. 78.º-A) and the expenses you declare (health, education, general expenses, VAT on invoices). What remains is the IRS due².

IRS due = bracket coleta − deduções à coleta

The refund (or the amount to pay) is then simply the difference between the IRS withheld over the year and this IRS due.

Why deductions create the refund

The monthly withholding tables are calibrated so that a plain salary withholds almost exactly the year’s coleta. So with no deductions at all, withheld and due would match almost to the cent, and the refund would be close to zero.

Most people’s refund comes precisely from the deduções à coleta: the dependants and the expenses pull the IRS due below what was already withheld. That is why validating invoices on e-fatura and confirming your household matter. They are what raise the amount you get back.

Worked example: a €1,500 salary

Take a gross salary of €1,500 a month (€21,000 a year, over 14 payments) and suppose €2,520 of IRS was withheld over the year.

1. Taxable income: €21,000 − €4,587.09 = €16,412.91.
2. The brackets give a coleta of €2,520.28 on that amount.
3. With no deductions, withheld (€2,520) and due (€2,520.28) almost match, and you would owe €0.28.

Now add one dependant: you subtract €600 from the coleta, and the IRS due drops to €1,920.28. Having already withheld €2,520, you get a €599.72 refund. Declare a further €800 of deductible expenses and the refund rises to €1,399.72. Run your own case in the IRS refund calculator.

When do I get my IRS refund?

The IRS return is filed between 1 April and 30 June. The tax authority usually starts paying refunds from mid-April, and most are processed by 31 July. Those who use the automatic IRS and file early tend to be paid first.

The calculator estimates how much you will get back; the date depends on the AT’s processing and on any discrepancies in the return.

Refund or IRS to pay?

These are the two possible outcomes of the annual settlement:

• Refund: you withheld more than the tax due. Welcome cash in April, but it means you advanced too much tax and went without that liquidity through the year.
• IRS to pay: you withheld less than the tax due (common with more than one income source, or after giving the wrong situation for the withholding). You pay the top-up when you file.

To understand the withholding side of this calculation, see what IRS withholding at source is and use the withholding calculator.