Erroneous store refunds

AUpeZ3UUcLio
AUpeZ3UUcLio Member Posts: 2 Newcomer
in Income

Hi, everyone.

My question is whether an erroneous store refund is taxable income.

In two unrelated instances, I returned merchandise that I had purchased, and I received a refund for more than I had paid. The first time, I bought something on sale and when I returned it, the store mistakenly refunded me the full price. The second time (which involved a different store), my refund was processed twice, so I received double what I should have.

Is the extra money I received due to the stores' errors taxable income?

Thank you for your help!

Tagged:

Answers

  • MatthewD
    MatthewD FreeTaxUSA Admin, FreeTaxUSA Agent Posts: 811 image
    Hello AUpeZ3UUcLio,

    This is a good question. It depends. If this was for personal merchandise, then no, it is not taxable income. However, if it was for a business and was a deductible expense for the merchandise, then the refund and the extra amount would be reported as Other Business Income and would increase your overall taxable business income.

Categories