This article is for information only and is not tax advice.
This article explains why your refund can be smaller than the tax that was withheld from your income.
What is a tax refund?
Your refund is the tax you overpaid. It is not the tax you paid. The refund is the difference between the tax already paid and your total tax.
For example, your employer withholds 2,000 USD of tax during the year, and your total tax is 1,500 USD. Your refund is 500 USD.
Social Security and Medicare (FICA) tax is not part of your income tax refund.
Why is my refund smaller than the tax withheld?
Your total tax depends on several factors:
The total income that you earned.
The tax treaty benefits that you qualify for.
The time that you spent in the US. This affects your tax residency status, which decides how your tax is calculated.
The benefits that you can claim. Nonresident aliens cannot claim many benefits that residents can claim.
For example, nonresident aliens cannot claim the standard deduction, except for students and business apprentices from India under the tax treaty. They generally cannot claim the Earned Income Tax Credit, the Hope Credit, or the Lifetime Learning Credit.
Why is my refund different from the refund of a friend?
Each tax situation is different. Income, tax treaty benefits, days in the US, and the tax withheld can differ between two people. A friend may receive a larger refund for these reasons.
What should I check if I think my refund is wrong?
Compare the income and the tax withheld in Sprintax with your income documents.
Check your tax treaty details.
Check the dates and details of your time in the US.
If all details are correct, Sprintax has calculated your refund from this information.