Data from the Internal Revenue Service shows Americans are receiving higher tax refunds this filing season, with early returns indicating both larger average payments and increased total disbursements compared to last year.
As of April 3, nearly 100 million tax returns had been processed. The average refund stood at $3,462, up from $3,116 during the same period in 2025, according to IRS figures reported by The Washington Post.
Total refunds issued over the same period reached more than $241 billion, compared with $211 billion at the same point last year.
The increase follows a tax law passed by Republicans in Congress in July 2025 that took effect midyear. Because employer withholding tables were not fully adjusted at the time the law came into force, many workers had more tax withheld from paychecks than required under the revised rules.
The legislation expanded several tax provisions, including an increase in the standard deduction and changes to targeted deductions affecting certain income categories. The child tax credit rose to $2,200 per child.
New deductions introduced for tax years 2025 through 2028 include exemptions for qualifying tip income, overtime pay, and interest on certain car loans tied to eligible vehicles.
According to reporting by The Washington Post, more than 23 million households have claimed the overtime deduction so far, making it one of the most widely used new provisions. Kasey Pittman, managing director of tax policy at Cherry Bekaert, told the newspaper that the provision is contributing to higher refund amounts in early filings.
Data cited by Politico shows just over one million households have claimed the car loan interest deduction, which applies only to specific new vehicle purchases made in 2025.
Separate analysis from the Bipartisan Policy Center indicates the legislation also increased the maximum state and local tax (SALT) deduction to $40,000 for eligible married couples earning up to $500,000, up from a prior cap of $10,000.
IRS data shows more than 70% of processed returns filed by early April resulted in refunds, compared with 67% in the same period last year and 62% for all filings last year.
Before this filing season, average refund levels had remained relatively stable, including $3,167 in 2025, $3,138 in 2024 and $3,167 in 2023, according to IRS historical data.
Employers are expected to adjust withholding formulas in line with the updated tax law for the current tax year, which will affect how much tax is collected from wages during the year rather than at filing time.
