When did the federal income tax first become law?

• A. 1861
• B. 1909
• C. 1913
• D. 1945

Answer: (B)

The key idea is how the federal government first gained authority to tax personal income. It began during the Civil War, when Congress enacted a tax on incomes in 1861 to help fund the war effort. This wartime income tax was temporary and was eventually repealed in the years after the war. The system that most people recognize today—the modern federal income tax—came later, after the 16th Amendment was ratified in 1913, which allowed Congress to levy an income tax without having to apportion it among the states, and with the Revenue Act of 1913 establishing the current framework and brackets. So, the earliest time income tax first became law was 1861, while the modern income tax structure dates to 1913.