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With less than a month left until the federal tax deadline, tax refunds are on average higher than last year, but the change is smaller than some early expectations.
In a January announcement, the White House cited multiple media reports based on an early October study by investment bank Piper Sandler that said the average tax refund could increase by “more than $1,000.”
So far, the change in average payments has been smaller than the estimated $1,000, according to IRS filing season data.
The average tax refund as of March 6 was $3,676, up from $3,324 during the same period last year, the IRS reported last week. This figure is based on about 60.7 million of the 164 million individual returns expected by the April 15 deadline.
How will tax refunds change?
This season, experts say your tax refund or outstanding balance could depend on several factors, including what new tax breaks affect your situation, your 2025 paycheck withholding, and changes in your income and lifestyle.
“I wouldn’t say that refunds are dramatically higher than they were before,” Tom Oseven, director of tax content and government relations at the National Association of Tax Professionals, told CNBC.
So far this season, the average refund amount peaked at $3,804 on Feb. 20, up from $3,453 about a year ago, but gradually declined over the next two weeks.
This mid-February spike is common when refunds, including the earned income tax credit or the refundable portion of the child tax credit called the additional child tax credit (ACTC), start appearing in payments.
After a spike in February, average refunds typically decline steadily until tax day, according to the Bipartisan Policy Center, which analyzed IRS data from the past four seasons.
Which taxpayers will get more refunds?
In his opening statement at a House Ways and Means Committee hearing on March 4, ranking member Rep. Richard Neal (D-Mass.) said the benefit of this season’s tax refund for the average American is “much less than promised.”
Later in the same hearing, Social Security Administration Administrator and IRS CEO Frank Bisignano said some filers who applied for President Donald Trump’s new tax cuts were already seeing their average refunds increase by $775 over last year.
These filers are claiming President Trump’s new deduction under Schedule 1-A, which will be reflected on their personal tax returns. This form includes deductions for tip income, overtime pay, senior citizens, and auto loan interest.
Overall, taxpayers are receiving “bigger refunds, faster,” Bisignano said.
As of March 8, nearly 45% of tax filers claimed one of President Trump’s new Schedule 1-A tax cuts this season, according to a release from the U.S. Treasury Department.
The expanded state and local tax credit limit, known as SALT, could also mean higher refunds for some people. However, to benefit from the new cap, filers must itemize their tax deductions instead of claiming the standard deduction.
Based on the most recent IRS data, nearly 90% of returns used the standard deduction during the 2022 tax year. In the same year, approximately 15 million returns claimed the SALT deduction, less than 10% of returns.
