What is the effect of having a federal tax withholding on a taxpayer who has not met minimum income requirements?

Having federal tax withholding means that an amount of money is deducted from a taxpayer's paycheck and sent to the IRS as a prepayment of their estimated annual tax liability. Even if a taxpayer has not met the minimum income requirements to be taxable, they can still claim a refund for any federal taxes that were withheld from their earnings.

This is important because even if their income is below the threshold for owing taxes, any amount taken out in withholding can be refunded when they file their tax return. Therefore, if a taxpayer had excess withholding compared to their tax liability, which may be zero in their case, they would be entitled to receive that withheld amount back as a refund.

This aspect of the tax system is designed to ensure that taxpayers do not lose out on money that was unnecessarily withheld, even if they ultimately owe no tax. Thus, the ability to claim a refund for federal withholdings is a key feature of how withholding works for those not meeting minimum income requirements.