IEEPA Tariff Refunds: How Much Your Business Gets Back, the Deadlines, and the Tax

On February 20, 2026, the Supreme Court ruled that the tariffs imposed under the International Emergency Economic Powers Act — the "fentanyl", "reciprocal" and "baseline" duties — were never lawful. The government has been handing the money back since April. By its own court filing, US Customs and Border Protection had paid $100 billion of an estimated $166 billion by July 31.

If you run a small business that imported goods in 2025, some of the remaining $66 billion may be yours. Three things decide whether you actually see it, and how much of it you keep: whether you were the importer of record, whether your entries are still inside a filing window, and what you do with the money when it lands — because most of it is taxable, and booked the wrong way it makes one month of your books unreadable.

This guide works through all three with numbers. It is general information for US businesses, not legal or tax advice.

Who gets the moneyThe name on the customs entry, not the one who paid the price

CBP refunds only the importer of record (or a party the importer designates), and only by ACH into the bank account on file in its ACE portal. The US Chamber of Commerce's FAQ puts it bluntly: businesses that bought from an importer are not eligible, even if the tariff was passed on to them in the price.

That leaves most small businesses in one of three positions:

If you paid a duty line on a UPS, FedEx or DHL invoice, keep those invoices together — they are how the carrier matches a refund back to you. If you bought through a domestic distributor that added a tariff surcharge, the contract decides whether any of the refund flows back; there is no federal process for it.

How much comes backDuty plus about 7% interest

The refund is the IEEPA duty you deposited, plus interest under 19 U.S.C. § 1505 from the day you paid it until the entry is liquidated or reliquidated. The interest rate is the IRS quarterly rate — 6% when the Chamber published its FAQ — and it compounds daily. CBP nets any other money you owe it against the refund.

We modelled three businesses that paid IEEPA duties every month from April 2025 until the ruling, eleven entries each, with the refund landing on November 15, 2026:

Interest adds about 7.4% on top of the duty in every row, because it depends on time, not size. Both assumptions make these figures low: the rate ran between 6% and 7% over the period, and IEEPA duties on goods from China, Canada and Mexico started in February and March 2025, before our first entry.

The deadline that is not one dateEvery entry has its own clock

This is where small importers are losing money. CAPE, the refund system CBP launched on April 20, 2026, does not take everything. Its first phase covers entries that are unliquidated, or liquidated within the previous 80 days. Entries that liquidated earlier and became final are listed as a later phase "under evaluation", and a Justice Department appeal over the court's power to order those refunds is still open.

Liquidation usually happens about 314 days after entry. That puts every month of 2025 imports on a different clock:

Read it from the top. Entries from spring and early summer 2025 have already left CAPE's first phase, and for the oldest ones even the 180-day protest window has closed. Entries from autumn 2025 onward can still go through CAPE if you file before their 80-day window shuts — for October 2025 imports, that is roughly the second week of November.

For entries that already liquidated and are past the 80 days, trade lawyers have been advising importers to file a protest within 180 days of liquidation so the claim stays alive while CBP builds the later phases. On September 9, members of Congress wrote to CBP that some importers had missed windows because the agency had not approved their ACE accounts in time — which is the strongest argument for setting the account up this week rather than when you get round to it.

What to do this weekFive steps, in order

When the money landsDo not let it wreck the month

Most small businesses put import duty where it belongs: in the cost of the goods. That is correct, and it is exactly why the refund needs care. Take the small online store from the table above — $40,000 of sales a month, cost of goods at 45%, $12,000 of overheads — and drop the $35,429 refund into November.

A 138% gross margin is not a result; it is a broken chart for the next twelve months, every time you compare November to anything. Keep the operating numbers clean by recording the refund as a separate one-off line. In a Business P&L Tracker that is an income entry under a custom category — "Tariff refund" — so the margin trend stays the business and the windfall stays visible.

The duty on goods still sitting on your shelves is different: it was never expensed, so it comes off the cost of that stock rather than going to income. If you track stock at landed cost — purchase price plus freight and duty, as the Inventory Tracker does on every delivery — the refund lowers the average cost of the units still on hand, and your margins on them look better from here on. Whether you do this for tax or only in your management books is a question for your accountant; what matters is that you know which units the duty sat on.

The tax on itPlan to hand back about 30%

The IRS has not issued guidance specific to these refunds, but the general rule is old and well understood. Under the tax benefit rule (IRC § 111), getting back an expense you deducted in an earlier year is income in the year you get it back, to the extent the deduction reduced your tax. The interest CBP adds is ordinary interest income, whatever you did with the duty.

For the small online store, run as a sole proprietorship, assume 85% of the imported goods had been sold by the end of 2025 and 15% were still in stock:

So the store keeps about $24,760 of a $35,429 refund, before state tax. Two consequences are worth acting on. If the refund lands in the fourth quarter, it raises what you owe for the year after the September estimate was already paid — the quarterly estimated tax guide covers the safe-harbour rule that can keep a one-off like this from triggering a penalty. And if your business ran at a loss in 2025, part of the refund may not be taxable at all, because the original deduction never reduced your tax. That is the case to take to a CPA with the numbers in hand.

Prices and the tariffs that replaced themThe refund is not a price cut

In surveys over the past year, more than 70% of small businesses said they had raised prices to cover tariffs. Customers who paid those prices have no claim on your refund — only a contract that itemised a tariff surcharge might create one, and if your invoices did that, read the terms before you spend the money. When you write new invoices, agree the total price up front and keep taxes on their own line, as the invoice guide sets out — a surcharge added later is the thing customers will remember.

Nor did import costs go back to 2024. The White House replaced the IEEPA duties within hours of the ruling with a temporary 150-day surcharge under Section 122, which expired on July 24, 2026, and new Section 301 duties of 10–12.5% on goods from about 60 economies took effect the same minute. Section 232 and the older Section 301 tariffs were never part of the IEEPA case and are not being refunded. Recost your next delivery at the rate on the new entry summary, not at the rate you remember.

Frequently asked questionsTariff refunds, briefly

Who is eligible for an IEEPA tariff refund? The importer of record on the customs entry, or a party it designates, who paid IEEPA duties — the fentanyl, reciprocal and baseline tariffs struck down on February 20, 2026. Businesses that bought from an importer are not eligible directly. For parcels cleared by UPS, FedEx or DHL, the carriers file and pass refunds back to whoever paid the duty.

How do I claim a tariff refund from CBP? Update your importer record (Form 5106), open an ACE portal account, enroll in ACH refunds, then file a CAPE declaration listing your eligible entry numbers. CBP says refunds generally arrive 60–90 days after the declaration is accepted, with interest.

Is there a deadline for IEEPA refunds? Not a single one. CAPE's first phase takes entries that are unliquidated or were liquidated within the previous 80 days. For entries liquidated longer ago, a protest must generally be filed within 180 days of liquidation to keep the claim open while CBP works on later phases.

Is a tariff refund taxable income? Generally yes, to the extent the duty was deducted as cost of goods sold and reduced your tax. Duty on goods still in inventory reduces their cost instead, and the interest CBP pays is ordinary interest income. A business that ran at a loss may owe little or nothing on part of it. Ask a tax professional about your situation.

Do I have to refund my customers? There is no federal requirement to pass a tariff refund on to customers who paid higher prices. A contract or invoice that charged a separate tariff surcharge may be different, so check your terms.

Where these numbers come fromSources and assumptions

Rules and figures are from CBP's IEEPA duty refunds page (updated September 2, 2026), the US Chamber of Commerce's small-business refund FAQ, a CBP declaration filed with the Court of International Trade on August 6, 2026 (as reported by Supply Chain Dive), NRF, and the refund statements published by FedEx, UPS and DHL. Section 122 and Section 301 dates are from Global Trade Alert; tax treatment follows IRC § 111 and published CPA guidance.

The refund, deadline, P&L and tax figures are computed in drafts/ieepa-tariff-refunds-numbers.mjs. The businesses are illustrative. Interest uses a flat 6% compounded daily; liquidation dates use the typical 314-day cycle; the tax example assumes a sole proprietor in the 22% bracket and ignores state tax and the qualified business income deduction. The interest assumption biases refunds low; ignoring the QBI deduction biases the tax estimate slightly high.