- Tax refunds in 2025 are currently running 32% lower than they were a year ago. That gap is expected to close in the coming weeks, though, as returns claiming the Earned Income Tax Credit or the Additional Child Tax Credit begin to be processed.
Tax refunds for the just completed year are proving, so far, to be just under $1,000 less per taxpayer compared to refunds given in 2024.
The Internal Revenue Service says as of the week ending Feb. 14, the average refund amount stood at $2,169. That’s 32% less than the $3,207 average refund at this time a year ago.
Americans are moving a bit slower in filing their refunds as well. So far this season, the pace of returns received is 5% behind where things were at this point in 2024.
As Americans become more and more budget-conscious, the prospect of lower average refunds could be alarming, but the IRS says there’s no reason to panic.
“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,” the agency wrote.
Part of the reason for the lower refund amount could be that the IRS currently cannot issue refunds for returns that claim the Earned Income Tax Credit (EITC) or the Additional Child Tax Credit (ACTC). The PATH Act prohibits the IRS from doing so until mid-February. And last year’s comparison numbers included refunds from those claims.
Even with that caveat, it’s worth noting the average refund last year was slightly lower than the 2023 totals. In the last update given last year, the IRS reported an average refund of $3,138. In 2023, that total was $3,167.
The IRS is in the midst of turbulent times this tax season. Acting IRS commissioner Douglas O’Donnell announced his retirement this week, and DOGE has terminated over 6,000 workers.