It is dependent upon a difference between the tax that is owed to the Treasury at the end of the year and the amount that has been withheld throughout the year. If the amount of tax owed is less than the latter number, that individual receives a tax refund.

Not everyone is entitled to a refund; in 2026, eligibility is governed by the Department of Transportation (DOT) "Final Rule" and the specific fare rules of your ticket. You are legally entitled to an automatic cash refund if the airline cancels your flight or makes a "significant change" (defined as a delay of 3+ hours for domestic or 6+ hours for international) and you choose not to travel. This applies even to "non-refundable" tickets. However, if you voluntarily cancel a flight for personal reasons, you generally do not get a refund to your original payment method; instead, you usually receive an "Airline Credit" or "Travel Voucher" for future use, provided your fare allows for changes. Basic Economy fares are often the most restrictive and may not offer any credit if you cancel. If the airline provides you with a rebooking that you accept, you forfeit your right to a refund. Ultimately, the new rules ensure that if the airline fails to deliver the service, you get your money back, but if you decide not to fly, the "refund" is subject to the fine print of the ticket you purchased.