IRS refunds up $350 from last year, despite tax cut expectations

Taxpayers were told to expect a much bigger payoff from Republican-led tax cuts, but the early refund data shows a smaller gain so far. The average IRS refund had reached $3,462 through April 3, 2026, up $350 from $3,116 at the same point last year, even as total refunds rose to $241.744 billion. That is a healthy increase, but it falls short of the bolder expectations that circulated around the One Big Beautiful Bill Act.

The gap matters because refunds shape household budgets in a very concrete way. Families often use them to pay down debt, catch up on rent or car payments, cover medical bills, or rebuild savings. So when the White House and outside analysts suggested the 2025 tax cuts could lift refunds by around $1,000 or more, many filers were expecting a bigger windfall than the one now showing up in IRS data. The average direct-deposit refund was $3,454, and the IRS had issued 69,818,000 refunds overall by April 3, up 3.1% from a year earlier.

The explanation is in how tax cuts flow through the system. The Tax Foundation estimated the law reduced individual taxes by $129 billion for 2025 and said as much as $100 billion could come back as higher refunds this filing season. But it also said the IRS did not adjust withholding tables after the law passed, meaning many workers kept having too much withheld from paychecks during the year. That can make refunds look bigger at filing time even when the underlying tax cut is not arriving in one clean lump sum. The Bipartisan Policy Center has said the law’s effects are uneven, with broad changes producing smaller savings for tens of millions of taxpayers and larger gains for millions more, depending on deductions and credits.

Filing activity has also lagged slightly behind last year, which suggests many taxpayers were still sorting through the new rules as the season entered its final stretch. The IRS had received 99,802,000 returns and processed 99,034,000 by April 3, both down about 1% to 2% from the same point in 2025. The 2026 filing season opened on January 26 and closes on April 15. IRS.gov traffic had surged to 435,926,000 visits, up 58.0% from the prior year, as taxpayers checked refund timing, filing status and the details of a tax law that has not yet delivered the outsized refund bump many were promised.