Average U.S. Tax Refunds Rose 11.1% This Year Amid New Deductions

The average tax refund for U.S. filers this year reached $3,462, marking an 11.1% increase or about $350 more than last year, according to data reported by the New York Post. This rise occurred after the introduction of new deductions under President Trump’s “One Big Beautiful Bill Act,” which more than 53 million taxpayers utilized.

The deductions include tax-free tips and overtime, as well as provisions for seniors. However, the increase fell short of the $1,000 rise estimated by President Trump. Alex Durante, senior economist at the Tax Foundation, stated that taxpayer awareness might have played a role, noting that some individuals may not have claimed all available provisions.

Wealthier individuals often file extensions, which could raise the average refund once processed, Durante added, as the figure is an average rather than a median. A certified public accountant for TurboTax reported that many filers delayed until the last minute this year, with the IRS receiving about 1.6% fewer returns by April 3 compared to the previous year.

This delay may stem from confusion over the new deductions, leading to an estimated 20 million people at risk of missing the deadline. TurboTax extended its hours until midnight on the filing deadline to address questions about overtime, senior, and tip deductions.

A TurboTax survey from February found that 44% of Americans were unsure how the new tax provisions applied to their income.

A member of the American Accounting Association and a professor at North Carolina State University stated that the new deductions could lead to increased scams and noncompliance. He noted a higher presence of scammers promising larger refunds for high fees, with taxpayers bearing the risk during audits.

Additionally, smaller employers, such as restaurants, might struggle to adjust withholdings for tipped and overtime workers. Regional differences appeared in refund amounts, with an analysis from Upgraded Points showing Florida had the highest average at $4,433, followed by Texas, Wyoming, Nevada, and Louisiana.

States with tourism industries or no state income taxes, like Nevada and Florida, benefited more due to tipped workers and retirees claiming deductions, according to Durante.

The Tax Foundation estimated that the average refund could ultimately be $748 higher once all filings are processed. However, higher costs from the Iran war and tariffs, including increased gas prices, may offset this gain, potentially costing households $740 to $1,000 extra. Refunds are expected to decrease next year as the IRS issues new guidance and employers adjust withholdings.