IRS refunds are 32% lower on average so far this tax season

Average U.S. Tax Refunds Drop by Nearly $1,000 Compared to Last Year

Tax refunds for the most recent filing season are coming in significantly lower, with the average refund down by nearly $1,000 compared to the previous year, according to new data from the Internal Revenue Service (IRS).

As of the week ending February 14, the average refund amount stands at $2,169—a 32% decrease from the $3,207 average refund issued at the same time in 2024.

Taxpayers Filing at a Slower Pace

In addition to smaller refunds, Americans are filing their returns more slowly this year. The IRS reports that the number of tax returns submitted so far is 5% behind the pace of 2024.

With many households facing economic uncertainty, the prospect of lower refunds may be unsettling. However, the IRS insists there is no cause for alarm:

“Historically, filing season numbers even out as more tax returns come in; the IRS expects the tax return filing numbers will level out in future weeks as the April filing deadline approaches.”

Why Are Refunds Lower This Year?

One key reason for the drop in average refund amounts is the IRS’ delay in issuing refunds for taxpayers claiming the Earned Income Tax Credit (EITC) or the Additional Child Tax Credit (ACTC).

• Under the PATH Act, the IRS is prohibited from issuing refunds for these credits before mid-February—which skews early refund statistics.
• Last year’s early refund numbers included these credits, making year-over-year comparisons misleading.

Even with this factor in mind, refunds have been on a downward trend in recent years:

• 2024: The final average refund was $3,138.
• 2023: The final average refund was $3,167.

IRS Faces Turbulence Amid Layoffs and Leadership Changes

This tax season has been marked by significant upheaval at the IRS:

• Acting IRS Commissioner Douglas O’Donnell announced his retirement this week.
• DOGE (Department of Government Efficiency) has terminated over 6,000 IRS employees, part of broader federal workforce cuts under the Trump administration’s restructuring efforts.

As the tax season progresses, the IRS expects refund numbers to stabilize, but for now, many Americans may be in for an unpleasant surprise when they check their refund amounts.