Constructive Receipt: a tax term mandating that a taxpayer is liable for income, which has not been physically received, but has been credited to the taxpayer’s account or otherwise becomes available for him or her to draw upon in the future. Constructive receipt of income prevents tax payers from deferring tax on income or compensation they have not yet utilized or spent.

For example, an employee who received a paycheck at the end of one year must report it as income that year, even if he or she didn’t deposit the check until after the new year.