RMC No. 102-2026 and 103-2026: What Changed in BIR Tax Credit and Refund Rules

Revenue Memorandum Circulars No. 102-2026 and No. 103-2026, issued October 1, 2026, tighten the procedure for claiming a BIR tax credit or refund of excess creditable withholding tax (CWT) or income tax overpayments — pinning down exactly which BIR office receives BIR Form 1914, confirming when the BIR’s 180-day processing clock actually starts, and restating the Section 76 carry-over trap along with its one exception for businesses that permanently close.

What do RMC No. 102-2026 and RMC No. 103-2026 actually cover? #

RMC No. 102-2026 and RMC No. 103-2026 are companion circulars that amend earlier BIR issuances governing how taxpayers apply for a credit or refund of excess CWT and income tax overpayments. They do not create a new refund right — the underlying rights come from NIRC Sections 76, 204(C), and 229 — but they tighten the administrative path: which office gets BIR Form 1914, when the two-year deadline runs, and when the BIR’s statutory processing period actually begins. Coverage of the two circulars appeared in Philippine business press on October 1–2, 2026, including BusinessMirror’s “BIR updates rules for tax credit, refund petitions,” BusinessWorld’s “BIR clarifies refund or credit rules for excess tax payments,” and the Manila Times’ “BIR tightens rules for tax refund claims.”

Where do you file BIR Form 1914 now? #

A claim for a CWT or income tax credit/refund is filed on BIR Form 1914, the Application for Tax Credits/Refunds — and the circulars are specific about which office receives it: the one with jurisdiction over the taxpayer-claimant, not just any convenient BIR window. For most taxpayers that means the Revenue District Office (RDO) where they are registered; for taxpayers enrolled with the Large Taxpayers Service, it is instead the appropriate Large Taxpayers Audit Division (LTAD) or Large Taxpayers Division (LTD) handling their account. A separate rule applies to one specific claim type: a refund or credit claim for capital gains tax (and the associated documentary stamp tax) on a sale of real property classified as a capital asset is filed with the RDO that has jurisdiction over where the property is physically located, rather than the claimant’s own registered RDO. Filing BIR Form 1914 at the wrong office is a procedural defect that can stall a claim before the BIR ever reaches the merits.

The Section 76 carry-over election — and why it’s (almost) irrevocable #

If your Annual Income Tax Return (AITR) shows excess income tax, you choose between carrying it over against next year’s quarterly liabilities or applying for a cash refund or tax credit certificate — and under NIRC Section 76, carry-over is a one-way door for that taxable period. Once a corporation or individual marks the carry-over option on the AITR, it cannot later file BIR Form 1914 to claim a refund or TCC for that same excess amount, no matter how much of the carried-over credit ends up unused. This irrevocability rule predates the 2026 circulars — it’s written into the Tax Code itself — but RMC No. 102-2026 restates it explicitly as part of the updated refund procedure, including as it reads in the statute’s own second paragraph on the point:

“Once the option to carry-over and apply the excess quarterly income tax against income tax due for the taxable quarters of the succeeding taxable years has been made, such option shall be considered irrevocable for that taxable period and no application for cash refund or issuance of a tax credit certificate shall be allowed therefor.”

That is the operative text of Section 76 (Final Adjustment Return), second paragraph, of the National Internal Revenue Code of 1997, as amended — the same passage the Supreme Court has quoted and applied in cases construing the irrevocability rule (see our case-law coverage in UCPB v. CIR). RMC No. 102-2026 confirms one statutory exception on top of it: a taxpayer that permanently ceases operations may still claim a refund of the excess income tax under Section 76(C), even after having previously elected to carry it over — the irrevocability rule assumes the business is still around to use the carried-over credit in a future period, and a taxpayer that has shut down has no future period left.

The two-year deadline, measured from the AITR filing date #

A going-concern taxpayer that chooses credit or refund over carry-over must file BIR Form 1914 within two years from the date the AITR showing the overpayment was filed — not two years from when the excess was discovered, and not an open-ended window just because the return is on file with the BIR. This lines up with the general two-year prescriptive period for erroneously or excessively collected tax under NIRC Section 229, and with the written-claim requirement under NIRC Section 204(C), which the BIR applies to CWT and income tax refund claims alike. Missing the two-year mark generally forfeits the claim regardless of how well-documented the overpayment is — a taxpayer who later changes its mind from carry-over to refund, or simply delays filing, risks losing the claim to prescription rather than to any dispute over the underlying numbers.

When does the BIR’s 180-day clock actually start? #

An AITR that shows an overpayment already counts as a written claim for tax credit or refund under NIRC Section 204(C) — but RMC No. 102-2026 and RMC No. 103-2026 are explicit that the BIR’s 180-day period to act on that claim does not start from the AITR filing date. The clock starts only once the taxpayer separately files BIR Form 1914 together with the complete documentary requirements the BIR prescribes for that claim type (proof of payment, the AITR itself, supporting schedules, and the like). In practice this means a taxpayer who files an AITR showing excess CWT but waits months to submit BIR Form 1914 and its attachments is not accumulating “BIR inaction” time against the agency during that gap — the 180-day countdown under Section 204(C) simply hasn’t begun. Filing BIR Form 1914 promptly, with a complete document set the first time, is now clearly the trigger that starts the clock the taxpayer actually cares about.

Worked example: carry-over now, refund later — and what happens on closure #

Two companies with the same ₱480,000 excess income tax on their 2025 AITR take different paths in 2026, and the circulars’ rules produce different outcomes for each.

Meridian is stuck with its carry-over election for the 2025 excess precisely because it is still operating — it keeps applying the ₱480,000 against its 2026 and later quarterly income tax due until exhausted. Dalisay, by contrast, files BIR Form 1914 with its RDO after formally ceasing operations, attaches proof of the cessation, the 2025 AITR, and the schedule showing the unused ₱480,000 balance, and claims the refund under the cessation exception — something it could not have done had it stayed in business.

How this fits with the general refund and carry-over remedies #

RMC No. 102-2026 and RMC No. 103-2026 don’t replace the general refund framework — they tighten the procedure on top of it. For the broader picture of when a cash refund, tax credit certificate, or carry-over applies to an overpayment (including the mechanics shared with VAT and withholding corrections), see BIR Remedies for Overpaid Tax From a Filing Error: Refund, Tax Credit Certificate, or Carry-Over — that post covers the Section 204(C)/229 framework in general; this post covers what the 2026 circulars specifically changed about jurisdiction, timing, and the carry-over exception. Refund procedures for a different tax type, with its own statutory clock, are covered in How to File a BIR VAT Refund Claim: The 90-Day Processing Rule — VAT’s 90-day rule under Section 112 is a separate mechanic from the CWT/income tax 180-day rule under Section 204(C) discussed here, and the two should not be confused.

Frequently Asked Questions #

What do RMC No. 102-2026 and RMC No. 103-2026 change about BIR tax refunds? #

RMC No. 102-2026 and RMC No. 103-2026, issued around October 1, 2026, amend earlier BIR issuances on processing tax credit and refund applications for excess creditable withholding tax and income tax overpayments. They confirm that BIR Form 1914 must be filed with the office that has jurisdiction over the taxpayer-claimant, restate that the Section 76 carry-over election for excess income tax is irrevocable for that taxable period, and clarify that the BIR’s 180-day processing period under NIRC Section 204(C) starts only once BIR Form 1914 is submitted with complete documentary requirements, not from the date the annual income tax return was filed.

Where do I file BIR Form 1914 for a CWT or income tax refund claim? #

You file BIR Form 1914, the Application for Tax Credits/Refunds, with the BIR office that has jurisdiction over you as the taxpayer-claimant. For most taxpayers that is your registered Revenue District Office (RDO); for taxpayers under the Large Taxpayers Service, it is the appropriate Large Taxpayers Audit Division (LTAD) or Large Taxpayers Division (LTD). A refund or credit claim for capital gains tax and documentary stamp tax on a sale of real property classified as a capital asset is filed instead with the RDO that has jurisdiction over where the property is physically located.

If I already chose to carry over my excess income tax, can I still get a refund later? #

Generally no. Under NIRC Section 76, once a taxpayer elects on its annual income tax return to carry over excess income tax against future quarterly liabilities, that election is irrevocable for that taxable period, and the taxpayer cannot later apply for a cash refund or tax credit certificate for the same excess amount. The one exception RMC No. 102-2026 confirms is a taxpayer that permanently ceases operations — it may still claim a refund of the carried-over excess even though it had elected carry-over, under Section 76(C).

How long do I have to file a tax credit or refund claim under the new rules? #

A taxpayer that remains a going concern and chooses to seek a credit or refund of excess income tax, rather than carry it over, must file BIR Form 1914 within two years from the date the Annual Income Tax Return (AITR) showing the overpayment was filed. This is consistent with the general two-year rule under NIRC Sections 204(C) and 229 for claims for erroneously or excessively paid tax.

Does filing my Annual Income Tax Return start the BIR’s 180-day clock to act on my refund? #

No. An AITR showing an overpayment is itself treated as a written claim for tax credit or refund, satisfying the written-claim requirement of NIRC Section 204(C). But RMC No. 102-2026 and RMC No. 103-2026 clarify that the 180-day period the BIR has to act on the claim starts only once the taxpayer separately files BIR Form 1914 together with the complete documentary requirements the BIR prescribes — not from the AITR filing date itself.

Summary #

RMC No. 102-2026 and RMC No. 103-2026 don’t change who is entitled to a CWT or income tax refund — that’s still governed by NIRC Sections 76, 204(C), and 229 — but they close procedural gaps that used to leave taxpayers guessing: file BIR Form 1914 with the office that actually has jurisdiction over you (RDO, LTAD/LTD, or the property’s RDO for capital gains tax), expect the carry-over election on your AITR to be irrevocable unless your business permanently ceases operations, and don’t count on the BIR’s 180-day clock running before you’ve submitted BIR Form 1914 with a complete document set. For a taxpayer with excess CWT or income tax sitting on a 2025 or 2026 AITR, the practical move is the same either way: decide carry-over versus refund deliberately, because the 2026 circulars make clear there’s little room to change course afterward.