In February 2026, the Supreme Court of the United States determined that certain tariffs imposed under the International Emergency Economic Powers Act (IEEPA) were unlawful, and it obligated the federal government to repay affected importers and businesses in the U.S. and Puerto Rico approximately $166 billion, excluding interest1. The payments may be distributed over multiple periods. The estimated refund amount is based on currently available public and administrative information, and will be updated as more complete data become available.
In the National Income and Product Accounts (NIPAs), these refunds are classified as a capital transfer from the federal government because they are not associated with current period production, current import activity, or ongoing tariff policy. This classification reflects the one-time nature of the payments and their origin in the resolution of a legal dispute. The total payment of $166 billion ($664 billion at an annual rate) from the federal government is recorded on an accrual basis in the period in which the legal obligation became effective—that is, in the first quarter of 2026—regardless of the timing of subsequent cash payments.
Interest payments associated with tariff refunds are treated separately from the refunds themselves. The interest payments are treated as property income accruing to business for the period during which the government held those funds.
Capital transfers do not affect NIPA corporate profits from current production, gross domestic product (GDP), private saving or government saving because these refunds do not arise from current operating activity, sales, or production. Instead, the capital transfer payment from government increases government net borrowing while also increasing private domestic business net lending, as shown in NIPA Table 5.1, lines 39 and 36, respectively. Capital transfer payments and receipts associated with these refunds are recorded in NIPA table 5.11U, lines 13, 15, 31, 34, and 48. Capital transfers paid by the federal government are also presented in NIPA tables 3.1 (line 40) and 3.2 (line 46).