NOTES TO THE FINANCIAL STATEMENTS 128

Note 20. Collections and Refunds of Federal Revenue

Collections of Federal Tax Revenue for the Year Ended September 30, 2021

Federal Tax Year to Which Collections Relate

Tax

Revenue Prior

(In billions of dollars) Collections 2021 2020 2019 Years

Individual income tax and tax withholdings ................................ 3,593.9 ................................ 2,283.0 1,231.8 ................................ 43.8 35.3......................

Corporate income taxes ................................................................ 419.0 254.8 ................................ 130.5 ................................ 4.3 29.4 .................

Excise taxes ................................................................83.6 ................................ 63.2 ................................ 19.9 0.2 ................................ 0.3 ..

Unemployment taxes ................................................................ 50.4 ................................ 41.6 8.7 ................................ - 0.1 .....................

Customs duties................................................................ 85.6................................ 79.3 ................................ 6.3 - ..............................

- 

Estate and gift taxes ................................................................ 28.1 ................................ 1.5 21.1 ................................ 2.7 2.8......................

Railroad retirement taxes ................................................................ 5.3 ................................ 4.2 1.1 ................................ - - ...............

Fines, penalties, interest, and other revenue................................ 4.2 ................................ 4.0 0.2 ................................ - - ....................

Subtotal................................................................4,270.1 ................................ 2,731.6 ................................ 1,419.6 51.0 ................................ 67.9 ......

Less: amounts collected for non-federal entities................................ (0.5) ...............................................................................

Total................................................................................................ 4,269.6 ...........................................................................

Treasury is the government’s principal revenue-collecting entity. Collections of individual income and tax withholdings

include FICA/SECA and individual income taxes. These taxes are characterized as non-exchange revenue.

Excise taxes, also characterized as non-exchange revenue, consist of taxes collected for various items, such as airline

tickets, gasoline products, distilled spirits and imported liquor, tobacco, firearms, and others.

Tax and other revenues reported reflect the effects of tax expenditures, which are special exclusions, exemptions,

deductions, tax credits, preferential tax rates, and tax deferrals that allow individuals and businesses to reduce taxes they may

otherwise owe. The Budget Act (P.L. 93-344) requires that a list of tax expenditures be included in the annual Budget. Tax

expenditures may be viewed as alternatives to other policy instruments, such as spending or regulatory programs. For

example, the government supports college attendance through both spending programs and tax expenditures. The government

uses Pell Grants to help low- and moderate-income students afford college and allows certain funds used to meet college

expenses to grow tax free in special college savings accounts.

Tax expenditures include deductions and exclusions, which reduce the amount of income subject to tax. Examples are

the deduction for mortgage interest on personal residences and the exclusion of interest on state and local bonds. Tax

expenditures also include tax credits, which reduce tax liability dollar for dollar for the amount of credit. In taxable year

2021, taxpayers may claim a credit for up to $3,600 per child under age six and up to $3,000 per child age six through 17.

Other credits are targeted at business activity, such as credits for producing electricity from renewable energy or the research

and experimentation credit, which encourages businesses in the U.S. to increase investment in research activities. In addition,

tax expenditures include some provisions that allow taxpayers to defer tax liability. Examples include provisions that allow

immediate expensing or accelerated depreciation of certain capital investments, and others that allow taxpayers to defer their

tax liability, such as the deferral of recognition of income on contributions to and income accrued within qualified retirement

plans.

The total revenues reported in the Statement of Operations and Changes in Net Position and the related information

reported in this note, do not include explicit line items for tax expenditures, but the total revenue amounts and budget results

reflect the effect of these expenditures. Tax expenditures are discussed in this note, the unaudited MD&A, and in the

unaudited Other Information section of the Financial Report.
129 NOTES TO THE FINANCIAL STATEMENTS

Federal Tax Refunds Disbursed and Other Payments for the Year Ended September 30, 2021

Tax Year to Which Refunds Relate

Refunds Prior

(In billions of dollars) Disbursed 2021 2020 2019 Years

Individual income tax and tax withholdings................................ 1,081.2 533.3 ................................ 496.9 ................................ 38.3 12.7.........................

Corporate income taxes................................................................ 53.1 3.9................................ 6.4 ................................ 13.7 29.1 ....................

Other taxes, fines, and penalties ................................ 11.3................................ 3.4 ................................ 4.5 2.2 ................................ 1.2 .......

Total ................................................................ 1,145.6 ................................ 540.6 ................................ 507.8 54.2................................ 43.0 ...........

Reconciliation of Revenue to Tax Collections for the Year

Ended September 30, 2021, and 2020

(In billions of dollars) 2021 2020

Total collections of federal tax revenue ................................................................................................ 4,269.6 3,628.9............................

Refunds of federal taxes and other payments ................................................................ (1,145.6) ................................ (744.1) ...................

Individual and other tax credits ................................................................................................ 804.2 ................................ 436.8 ........

Federal Insurance Contributions Act - Tax................................................................................................ (16.4) (15.4) ........................

Federal Reserve earnings ................................................................................................ 100.1................................ 81.9 ...............

Change in taxes receivable ................................................................................................ 68.0 ................................ 91.7 .............

Nontax-related fines and penalties reported by entities................................................................ 81.4 ................................ 75.4 ......

Nontax-related earned revenue ................................................................................................ 94.6 ................................ 16.4 .......

Consolidated revenue per the Statement of Operations and Changes

in Net Position ................................................................................................................................ 4,255.9 3,571.6.............................

...................................................................................................................................................................................

Consolidated revenue in the Statement of Operations and Changes in Net Position is presented on a modified cash basis,

net of tax refunds, and includes other non-tax related revenue. Refunds of federal taxes and other payments and individual

and other tax credits in FY 2021 and FY 2020 include the CARES Act, CAA and ARP stimulus disbursements of $569.5

billion and $274.7 billion, respectively, to eligible taxpayers. Individual and other tax credits amounts are included in gross

cost in the Statements of Net Cost. Refer to Note 3—Accounts Receivable, Net for further explanation of line changes in

taxes receivable. The FICA – tax paid by federal entities is included in the individual income and tax withholdings line in the

Collections of Federal Tax Revenue; however, it is not reported on the Statement of Operations and Changes in Net Position

as these collections are intra-governmental revenue and eliminated in consolidation. The table above reconciles total revenue

to federal tax collections. The above table reflects a change in presentation for FY 2021. The table presentation was

reconfigured to reconcile Collections of Federal Tax Revenue to the Consolidated revenue per the Statement of Operations

and Changes in Net Position.
NOTES TO THE FINANCIAL STATEMENTS 130

Collections of Federal Revenue for the Year Ended September 30, 2020

Federal Tax Year to Which Collections Relate

Tax

Revenue Prior

(In billions of dollars) Collections 2020 2019 2018 Years

Individual income tax and tax 

withholdings ................................................................ 3,127.6 ................................ 1,947.9 1,118.5................................ 33.7 ................................ 27.5 ..

Corporate income taxes ................................263.6 ................................ 152.0 ................................ 89.0 10.0 ................................ 12.6 .................

Excise taxes ................................................................ 96.4 ................................ 72.2 23.9................................ 0.1 ................................ 0.2 ..

Unemployment taxes ................................................................ 40.8 34.5................................ 6.2 ................................ - 0.1 .....................

Customs duties................................................................ 74.4 ................................ 67.2 7.2 ................................ - ..............................

- 

Estate and gift taxes ................................................................ 18.2 2.6................................ 11.8 ................................ 2.1 1.7 ......................

Railroad retirement taxes ................................................................ 5.2 3.8 ................................ 1.4 ................................ - - ...............

Fines, penalties, interest and other 

revenue................................................................ 3.2 ................................ 3.1 ................................ 0.1 - ................................ - .........

Subtotal................................................................ 3,629.4 ................................ 2,283.3 1,258.1 ................................ 45.9 ................................ 42.1 ......

Less: amounts collected for nonfederal entities ................................................................ (0.5) ...............................................................................................

Total................................................................ 3,628.9...........................................................................................................

Federal Tax Refunds Disbursed and Other Payments for the Year Ended September 30, 2020

Tax Year to Which Refunds Relate

Refunds Prior

(In billions of dollars) Disbursed 2020 2019 2018 Years

Individual income tax and tax withholdings................................ 673.4 335.6 ................................ 299.3 ................................ 31.0 7.5.........................

Corporate income taxes................................................................ 59.5 4.0................................ 14.0 ................................ 20.2 21.3 ....................

Other taxes, fines, and penalties ................................ 11.2................................ 3.3 ................................ 5.6 1.3 ................................ 1.0 .......

Total ................................................................ 744.1 ................................ 342.9 ................................ 318.9 52.5................................ 29.8 ...........