[8] Because withholding is calculated on an annualized basis, an individual just entering the work force or unemployed for a long period of time will have more tax than is owed withheld.
Another argument is that it is better to get a refund rather than to owe money, because in the latter case one might find oneself without sufficient funds to make the necessary payment.
Many U.S. states send tax refunds in the form of prepaid debit cards to people who do not have bank accounts.
However individual earners can request a summary of earnings to see if they have overpaid or underpaid their tax for each given financial year.
Some refunds such as those due to changing tax codes or similar circumstances will be automatically processed via a P800 form.
[18] In such cases tax refunds for various work related expenses can also be claimed for up to the last four tax years; common examples include costs for accommodation (for example for offshore workers staying overnight before transport to a rig), food purchased while travelling between workplaces, or the purchase or hire or specialist equipment.
For self-employed or investment earning individuals, who owe greater than $3000 in net taxes in 2019 and one of the previous two years.
[21] A significant decrease in income for self-employed individuals or a forgotten deduction on the TD1 form can result in an overpayment of taxes.
The Canada Revenue Agency will pay compounded daily interest on delayed refunds, beginning on the later of May 31 or 31 days after the return is filed.
These cases include owed tax balances, Garnishment, and the existence of outstanding government debt.