Tax Refunds See Notable Increase This Season
The average tax refund this season has risen by 10.2% compared to around the same time last year, according to recent data from the IRS. This figure reflects a decrease from the 14.2% increase reported previously.
As of February 20th, the average refund for individual filers is $3,804, which is an improvement from last year’s average of $3,453, as noted by the IRS on Friday.
The IRS also mentioned that total refunds have reached approximately $109 billion, marking a 6.9% increase from the previous year. However, the number of processed returns has dipped by 2.4%.
Amid concerns about affordability, the Trump administration has pointed out how President Trump’s tax policies might influence this year’s refunds. In a release from late January, the White House referenced an October study that suggested average refunds could exceed “more than $1,000,” according to various media reports.
An Oxford Economics report, dated February 26, estimates that tax refunds could surge by nearly 20% this year, particularly benefiting middle- and upper-income households thanks to changes from Trump’s tax cuts enacted last year. Yet, experts warn that individual refunds may vary based on payroll deductions and how Trump’s tax reforms impact a family’s particular circumstances.
Tax Refund Trends in Late February
Under current law, the IRS is unable to issue refunds claiming the Earned Income Tax Credit or the refundable portion of the child tax credit—the Additional Child Tax Credit—until after February 15th.
Consequently, the earliest filing season statistics, which represent data up to February 6 and February 13, do not account for the numerous refunds associated with these credits.
“As we approach late February, the average tax refund typically increases,” remarked Andrew Lautz, director of tax policy at the Bipartisan Policy Center, a nonpartisan think tank.
Between February 13 and February 20, the average refund experienced a notable leap from $2,476 to $3,804. Nonetheless, experts caution that it’s premature to make definitive conclusions about this season’s average refund due to the limited data available.
For the 2025 returns, the maximum Earned Income Tax Credit is up to $8,046 for filers with three or more qualifying children. As for the average EITC payment for 2024, it was pegged at $2,916, according to the IRS, which notes that Trump’s tax cuts did not alter the EITC for 2025.
Moreover, Trump’s legislation aims to make the increase in the child tax credit permanent and raise the cap to $2,200. While the ACTC will continue to be adjusted for inflation, its value is unchanged starting in 2024 and will be worth up to $1,700 in 2025.
