The average tax refund is running significantly higher this filing season, new IRS data shows, with many taxpayers seeing bigger payouts tied to changes from the 2025 tax law overhaul.
Refund Numbers Climb as Tax Season Progresses
As of March 6, the average refund for individual filers was $3,676, marking a 10.6% increase compared to the same period in 2025, when the average was $3,324, according to the latest report from the Internal Revenue Service. This week-to-week figure dipped slightly from the $3,742 average reported the previous week, reflecting the typical seasonal pattern where refunds peak early and then gradually decline toward the April 15 deadline.
The data covers approximately 60.7 million individual returns received so far, out of the roughly 164 million total filings the IRS expects by the deadline. Historically, the average refund peaks around mid-February when returns claiming the earned income tax credit (EITC) and the refundable portion of the child tax credit (ACTC) begin to be processed in larger numbers, according to analysis from the nonpartisan Bipartisan Policy Center. After that spike, the average generally trends downward.
How the 2025 Tax Changes Are Boosting Refunds
The primary driver behind the larger refunds is the tax reform legislation passed in mid-2025, often referred to as the “big beautiful bill.” A critical factor is that the IRS did not adjust federal income tax withholding tables to account for the new law’s expanded deductions and credits until after the changes took effect in July 2025. This meant that for the second half of 2025, many employees had more taxes withheld from their paychecks than their final 2025 tax liability would require, leading to larger refunds when they filed in early 2026.
“There could be a lot of variation between taxpayers,” noted Garrett Watson, director of policy analysis at the Tax Foundation, in a prior interview with CNBC. The specific impact depends on a filer’s 2025 withholding history and which of the new tax breaks apply to their situation.
A key new feature on 2025 returns is Schedule 1-A, a form dedicated to several of the law’s new above-the-line deductions. As of March 8, the U.S. Department of the Treasury reported that over 27.5 million returns—nearly 45% of all filings processed—had claimed at least one deduction from this schedule. These include breaks for overtime pay, tip income, seniors (an increased standard deduction for those over 65), and auto loan interest.
Additionally, the law temporarily increased the cap on the state and local tax (SALT) deduction to $20,000, up from $10,000. However, this benefit is only available to taxpayers who itemize their deductions. In tax year 2022, nearly 90% of filers claimed the standard deduction, and only about 15 million returns (fewer than 10%) claimed the SALT deduction, per the latest IRS data. Experts anticipate the percentage of itemizers will rise for 2025 due to the higher SALT cap and other changes, potentially leading to substantially larger refunds for those in high-tax states who now itemize.
Political Context and Looking Ahead
The size of tax refunds has become a talking point as the midterm election cycle approaches, with both parties discussing affordability. In a late January statement, the White House cited media reports referencing early research from investment bank Piper Sandler to suggest average refunds could jump “by $1,000 or more” for many households due to the new law.
It’s important to note that while the current average is up significantly, the final average for the entire season may shift. The influx of returns claiming the EITC and ACTC, which typically boost the average in February, has already occurred. The remaining filings will largely be from taxpayers without these refundable credits, which may cause the average to settle closer to or even below the current level by Tax Day.
For individual filers, the ultimate refund amount remains highly specific to their income, deductions, credits, and how much was withheld throughout 2025. The overarching trend, however, is clear: the legislative changes from 2025 have resulted in a measurable increase in the average tax refund for early filers this season.
