Section 122 Refund Eligibility 2026: How to Claim After the CAFC Ruling

The May 7 2026 Court of International Trade ruling in Oregon v. United States (consolidated with Burlap and Barrel v. United States) held that the February 2026 Section 122 proclamation exceeded presidential authority under 19 USC 2132. The Federal Circuit issued an administrative stay on May 12 2026, so CBP kept collecting Section 122 through the July 24 2026 sunset. The rate that CBP actually assessed under HTS subheading 9903.03.01 was 10 percent for the entire run (the February 22 amendment announced a 15 percent rate, but the operative HTS subheading was never updated). If the Federal Circuit upholds the CIT on the merits, the entire 5-month collection of 10 percent becomes refundable to every importer who paid.

This guide assumes the Federal Circuit upholds the CIT and walks through the refund channels, the timing rules, the documentation, and a worked example. If the appeals court reverses, none of this applies; the duty paid stays paid. Either way, the protective filings described below preserve the position at low cost.

The legal posture

The CIT panel held 2 to 1 that the proclamation's balance-of-payments findings did not satisfy the "fundamental international payments problem" predicate that Section 122 requires. The CIT ordered the government to vacate the proclamation and refund duties collected.

The Federal Circuit administrative stay (May 12 2026) paused enforcement of the CIT order pending appeal. Briefing on the government's stay motion completed in late May 2026. As of the July 24 2026 sunset, the Federal Circuit had not issued a merits decision. The appeal is docketed at the Federal Circuit (CAFC Nos. 2026-1571 and 2026-1572).

If the Federal Circuit upholds the CIT, refunds become legally compelled. CBP would issue implementation guidance (analogous to the CSMS 60-XXX guidance that followed the IEEPA SCOTUS ruling in February 2026) within roughly 30 days of the appellate ruling. The refund framework would likely mirror the IEEPA pattern: blanket protest treatment, multi-entry consolidation allowed, two-year decision timeline from CBP.

The eligibility window

Within the eligible window the entry must also satisfy a timing rule for the refund channel:

• Not yet liquidated: file a post-summary correction (PSC) up to 270 days from entry summary date.
• Liquidated within the past 180 days: file a protest under 19 USC 1514 (CBP 19).
• Liquidated more than 180 days ago: generally time-barred for protest, but reconciliation-program entries and drawback claims have separate clocks.
• Re-exported merchandise: duty drawback under 19 USC 1313 up to 5 years from import.

The three refund paths

Path A: Protest (19 USC 1514, CBP 19)

For entries that have liquidated within the last 180 days. Filed in ACE under the protest framework. The protest must identify the entry number, the line item, the duty type being protested (Section 122 reciprocal tariff, chapter 99 HTS line), the legal basis (Federal Circuit ruling in Oregon v. United States, assuming upheld), and the requested refund amount.

CBP's IEEPA blanket protest treatment under CSMS 60-XXX is the precedent. A single protest can cover all line items on an entry. Multi-entry protests are also allowed for the same importer of record.

Decision timeline: CBP must rule on a protest within two years. Refund interest accrues from the date of overpayment at the CBP published rate (currently around 7 percent annualized).

Path B: Post-Summary Correction (PSC)

For entries that have not yet liquidated. PSC is filed in ACE up to 270 days from entry summary date or 15 days before scheduled liquidation, whichever is earlier. The PSC adjusts the duty owed on the entry to the correct (zero Section 122) amount.

For Section 122 entries that liquidate after the CAFC ruling, PSC is the cleanest channel. The correction happens before the entry is finalized, so there is no protest cycle.

Path C: Duty Drawback (19 USC 1313)

For Section 122 paid on goods that were subsequently exported or destroyed under CBP supervision. Drawback recovers 99 percent of the duty paid (1 percent administrative haircut). The drawback claim window is 5 years from the import date.

Drawback is the longest-runway channel and the right tool for inventory-held goods that are slated for export. It applies on top of the protest or PSC; an importer can use both for different parts of the same shipment.

Worked example: 1,000,000 USD of Chinese imports

You imported 1,000,000 USD of HTS 8517.62 from China on April 15 2026. The Section 122 rate actually assessed under HTS 9903.03.01 was 10 percent (the February 22 amendment announced 15 percent, but that rate was never implemented in the operative subheading). The entry liquidated on June 30 2026.

Duty paid at entry:

If the Federal Circuit upholds the CIT, you are eligible to recover the Section 122 line of 100,000 USD. The MFN, Section 301, MPF, and HMF lines are unaffected.

Net refund computation (via protest):

If part of the shipment was subsequently re-exported (say half the inventory shipped to Canada), the drawback channel applies to that portion:

The drawback haircut is small (500 USD on the half) and worth it when the entry has already liquidated more than 180 days ago and protest is time-barred for that portion.

The entry liquidated June 30 2026. Today is the publication date of this guide (July 25 2026). The 180-day protest window runs to December 27 2026. Plenty of time to file, but the protective filing should happen now to lock the position.

Documentation CBP wants

• Entry summary (CBP 7501) showing the chapter 99 Section 122 line.
• Commercial invoice and packing list.
• Proof of payment (statement of payment or ACE entry payment record).
• One-paragraph legal basis statement citing Oregon v. United States (CIT) and the Federal Circuit ruling.
• Section 122 calculation worksheet showing the refund amount per line item.
• Importer of record number and bond information.
• For drawback: export documentation (bill of lading, export invoice) tying the re-export to the original import.

Most of this comes out of the ACE entry record automatically. The legal basis statement is the only narrative item, and a single template paragraph works across all entries.

What to do now (the checklist)

Whether or not the Federal Circuit has ruled yet, do all of these:

1. Pull every Section 122 entry from February 24 2026 to July 24 2026. Generate the list from your ACE entry summary export or from your broker's records. Tag each entry with liquidation date (or expected liquidation date if not yet liquidated).

2. Identify the Section 122 amount per entry. This is the chapter 99 line on the 7501. Total across all entries to get your gross refund exposure.

3. Calendar the protest deadlines. 180 days from liquidation per entry. Prioritize the earliest-liquidating entries first (February and March 2026 entries are at the front of the queue).

4. File protective protests now where appropriate. For liquidated entries within the 180-day window, file the protest with the legal basis statement pending the Federal Circuit ruling. CBP will hold pending the appeal outcome. Cost is low, downside of missing the window is the entire refund.

5. File PSCs for unliquidated entries approaching liquidation. The 270-day clock runs from entry summary date.

6. Line up your customs broker or customs attorney. Volume matters. If you have more than 100 entries, batch them with a single legal team to keep per-entry cost low. For under 25 entries with small per-entry exposure, your broker can handle it.

7. Preserve drawback eligibility for re-exported inventory. Tag re-exports against the underlying Section 122 entry so the drawback claim can be assembled later.

8. Decide on tax treatment. If you have already deducted Section 122 as a cost of goods sold, the refund (if received) is reportable income. Coordinate with your tax accountant on the timing.

What is NOT refundable

• Section 232 steel and aluminum duties paid on the same entry. Independent statutory authority, unaffected.
• Section 301 China duties. Independent authority, unaffected.
• MFN HTSUS duty. Always payable.
• MPF and HMF. Independent fees, unaffected.
• Mexico and Canada fentanyl-enforcement duty (IEEPA narrow basis). Separate basis, unaffected by either the IEEPA SCOTUS ruling or the Section 122 CIT ruling.

The Section 122 line is the only refundable item from the post-sunset perspective. The rest of the duty stack stays paid.

Timing realities

If the Federal Circuit rules in late summer or early fall 2026 and upholds the CIT, CBP guidance follows within roughly 30 days. Protest decisions typically run 12 to 18 months from filing. Interest accrues throughout. Realistic disbursement timeline for a protest filed today on a June 2026 liquidation: refund cash in hand sometime in mid to late 2027 if the government does not seek Supreme Court review, mid to late 2028 if it does and the case takes a full SCOTUS cycle.

For cash flow planning, do not assume the refund arrives in the same fiscal year as the filing.

Model your refund estimate

The LandedFees Section 122 refund estimator takes your entry list and produces the per-entry refund amount, total exposure, calendarized protest deadlines, and an interest-accrual estimate to a specified disbursement date. Useful for sizing the working-capital headroom and for prioritizing which entries to protest first.

Estimate your Section 122 refund

Related guides

• Section 122 Sunset July 24 2026: What Changes for Importers
• What is Section 122? The 2026 Reciprocal Tariff in the Past Tense
• IEEPA Refund Eligibility: How to Claim After the SCOTUS Ruling
• Duty Drawback: Are You Owed a Refund?
• Duty Drawback Substitution Unused Merchandise

Citations

• 19 USC 2132 (Section 122 of the Trade Act of 1974): https://www.law.cornell.edu/uscode/text/19/2132
• 19 USC 1514 (protest authority): https://www.cbp.gov/trade/programs-administration/protests
• 19 USC 1313 (drawback): https://www.cbp.gov/trade/programs-administration/entry-summary/drawback
• 19 CFR 24 (interest on overpayments): https://www.ecfr.gov/current/title-19/chapter-I/part-24
• Skadden, "US Trade Court strikes down Section 122 tariffs": https://www.skadden.com/insights/publications/2026/05/us-trade-court-strikes-down-section-122-tariffs
• Holland and Knight, "US Court of International Trade invalidates the administration's Section 122 tariffs": https://www.hklaw.com/en/insights/publications/2026/05/us-court-of-international-trade-invalidates-the-administrations
• Gibson Dunn, "Section 122 global tariffs invalidated by the Court of International Trade": https://www.gibsondunn.com/section-122-global-tariffs-invalidated-by-the-court-of-international-trade-ruling-and-next-steps/
• Troutman Pepper Locke, "Federal Circuit hits pause on CIT Section 122 ruling": https://www.troutman.com/insights/federal-circuit-hits-pause-on-cits-section-122-tariff-ruling/
• CBP CSMS 60-XXX (IEEPA refund implementation precedent, February 28 2026): https://content.govdelivery.com/accounts/USDHSCBP