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Average U.S. Tax Refund Jumps Nearly 11% as New Deductions Take Hold

Policy changes alongside unchanged 2025 withholding lifted many refunds.

Stock image/file photo: Tax return forms with a magnifying glass and U.S. Dollars.
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U.S. Secretary of the Treasury Scott Bessent speaks to reporters before walking into the White House in Washington, U.S., March 13, 2025. REUTERS/Evelyn Hockstein

Overview

  • IRS data through March 20 shows the average refund at $3,571, up 10.9% from a year ago, with more than 56.7 million refunds issued totaling over $202 billion.
  • Treasury Secretary Scott Bessent says nearly half of filers are using new tax breaks from last year’s law, and 25% of returns have claimed the overtime deduction.
  • The One Big Beautiful Bill Act created temporary breaks on tips and overtime income, interest on loans for new U.S.-assembled cars, and an extra senior deduction, all claimed on a new Schedule 1-A.
  • Many refunds are larger because the IRS left 2025 paycheck withholding unchanged, and Bessent says workers are now adjusting 2026 withholding to boost take-home pay.
  • Analysts report the gains skew toward groups like overtime earners and households with large state and local taxes, and advisers urge using refunds to build emergency savings or retirement funds.