IRS touts a 24% increase in tax refunds compared to the previous administration

WASHINGTON (AP) — Tax refunds this season are up 24% compared with the four-year average of refunds before President Donald Trump took office, his administration said Thursday — a change credited to Republicans’ tax legislation signed into law last year.

As the tax season kicked off in January, the White House had boasted that average returns were projected to rise by at least $1,000. But currently, the average refund amount is $3,521, according to the latest IRS data, which is an 11% increase from last tax year’s $3,170 average refund payment.

A Trump administration official who spoke on the condition of anonymity to provide a preview of the data analysis said the increase in refunds is due to tax breaks and spending cuts that impact taxpayers across income brackets, including no tax on tips, no tax on overtime, deductions for car loan interest and certain deductions for seniors.

The official declined to specify which tax deduction had provided the greatest savings for taxpayers. The analysis was based on daily Treasury statements over the 2021-2026 period.

Asked whether the Trump administration is concerned that any potential economic benefit from higher tax refunds could be offset by higher gas prices brought on by the war in Iran and disruptions in the Strait of Hormuz, the official said money is going into people’s pockets through the increased refunds.

The nonpartisan Congressional Budget Office estimates that the Republican tax and spending law will add $4.2 trillion to the national debt through fiscal year 2034, according to the latest Budget and Economic Outlook.

The tax season began in January and with the clock ticking, taxpayers have until April 15 to file their taxes or request an extension.