Tax Refunds Rise This Season
The average tax refund this season has increased by 11.1% compared to the same period last year, based on recent data from the IRS.
As of April 3rd, the average amount for individual filers reached $3,462, up from $3,116 last year, according to a report from the IRS on Friday. The data represents approximately 99.8 million individual returns, with around 164 million people expected to file by the April 15 deadline.
Many taxpayers are seeing larger refunds this year, largely attributed to the changes made in the 2025 legislation signed by President Trump. Republicans credit these policies for the increase in refunds, which include new deductions for income from tips and overtime, as well as benefits for seniors and auto loan interest. However, some analysts caution that rising gasoline prices due to the conflict in Iran might balance out those benefits.
As the midterm elections approach, affordability remains a hot topic for both parties, especially with many Americans feeling the pinch from increasing costs of gas, electricity, food, and other essentials.
Interestingly, nearly 23% of filers who anticipate a refund plan to use it for paying down credit card debt, while the same proportion intends to save the money, based on the findings from a recent CNBC and SurveyMonkey Quarterly Money Survey.
Future Trends in Average Refunds
Despite the legal changes under President Trump, the trend in average refunds is consistent with previous years. The largest refunds were typically issued in late February, tapering as the tax deadline approaches. Recent statements from the White House suggested that the average taxpayer could see over $1,000 in additional benefits, though it’s been noted that the average refund has been decreasing slightly year-on-year, increasing by about $350 based on IRS findings.
This average might shift further with two more IRS updates before the deadline on April 15.
“It looks like individuals who earn tips and overtime might be filing earlier to secure a larger refund,” Andrew Lautz, director of tax policy at the Bipartisan Policy Center, mentioned in a recent press conference. According to a poll of 1,200 Americans conducted in March by the Bipartisan Policy Center, around 81% of filers with income from tips or overtime tend to file in January or February.
If this trend is consistent, the average refund might actually be lower by the filing deadline, Lautz warned. On the other hand, late filers may push the average up if they take advantage of the federal deduction limit for state and local taxes (SALT). Trump’s 2025 legislation raised this limit significantly from $10,000 to $40,000, which could benefit those who itemize their deductions.
