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With the federal tax deadline less than one month away, tax refunds are higher on average compared to last year, but the change has been smaller than some early projections.
In a January release, the White House said average tax refunds could increase “by $1,000 or more,” citing several media reports with early October research from investment bank Piper Sandler.
So far, the average payment change has been smaller than that $1,000 estimate, according to IRS filing season data.
As of Mar. 6, the average tax refund was $3,676, up from $3,324 around the same time last year, the IRS reported last week. That figure is based on about 60.7 million individual returns out of the 164 million expected through the April 15 deadline.
How tax refunds can change
This season, your tax refund or balance due could depend on several factors, including which new tax breaks impact your situation, your 2025 paycheck withholdings, plus income and life changes, experts say.
“I really wouldn’t say that refunds are dramatically higher than they’ve been,” Tom O’Saben, director of tax content and government relations at the National Association of Tax Professionals, told CNBC.
So far this season, the average refund size peaked at $3,804 on Feb. 20, an increase from $3,453 about one year prior, and then gradually declined over the next two weeks.
That mid-February spike is common once payments start reflecting refunds that include the earned income tax credit or the refundable part of the child tax credit, known as the additional child tax credit or ACTC.
After that February jump, the average refund typically declines steadily through Tax Day, according to a Bipartisan Policy Center analysis of IRS data from the previous four seasons.
Which taxpayers are seeing bigger refunds
During his opening statement at a Mar. 4 House Ways and Means Committee hearing, ranking member Rep. Richard Neal, D-Mass., said that this season’s tax refund gains have been “much smaller than promised” for the average American.
Later during the same hearing, Frank Bisignano, Social Security Administration Commissioner and IRS CEO, said that certain filers claiming President Donald Trump‘s new tax breaks were already seeing average refunds that were $775 higher than last year.
These filers have claimed Trump’s new deductions on Schedule 1-A, which feeds into individual tax returns, he said. This form includes the deductions for tip income, overtime earnings, seniors and auto loan interest.
Overall, taxpayers are seeing “bigger refunds, faster,” Bisignano said.
As of Mar. 8, nearly 45% of tax returns have claimed one of Trump’s new tax breaks from Schedule 1-A this season, according to a U.S. Department of the Treasury release.
The bigger limit for the state and local tax deduction, known as SALT, could also drive higher refunds for some. However, filers must itemize tax breaks rather than claiming the standard deduction to benefit from the new cap.
During tax year 2022, nearly 90% of returns used the standard deduction, based on the latest IRS data. The same year, about 15 million returns claimed the SALT deduction, which was fewer than 10% of filings.
