IRS data show refunds up as return filings slow in early tax season

Average tax refunds are running ahead of last year, but the 2026 filing season has kicked off at a slower pace, according to new data from the Internal Revenue Service.

The IRS said the average refund for individual filers stood at $3,676 as of March 6, up 10.6% from $3,324 at roughly the same point a year earlier. That figure was also down slightly from the $3,742 average reported a week earlier, a pattern that tracks the typical tax-season arc after refunds tied to certain credits begin flowing in mid-February.

At the same time, return volume has lagged last year’s pace. The IRS has received about 60.7 million returns so far this season, down 1.2% from the comparable period in 2025.

A report by Politico noted that decline follows smaller early-season pullbacks in each of the prior two years and leaves filing activity well below pre-pandemic levels.

For advisors, that mixed bag of outcomes suggests that refund headlines may not tell the full story for households still sorting through 2025 tax changes. In particular, larger refunds appear tied in part to provisions enacted last year under the tax package embedded within President Donald Trump’s One Big Beautiful Bill Act.

The IRS did not update paycheck withholding after the July 2025 changes, according to CNBC, meaning some workers may have overpaid taxes for part of the year and are now getting that money back through refunds.

The new rules have also introduced more moving parts. A new Schedule 1-A includes deductions tied to overtime pay, tip income, seniors, and auto loan interest. According to a Treasury Department release this week, more than 27.5 million returns – or nearly 45% of filings as of March 8 – claimed at least one of those new tax breaks.

A higher cap on the state and local tax deduction is also expected to boost the number of SALT filers, who stand to get bigger refunds depending on how well they can itemize eligible tax breaks.

“There could be a lot of variation between taxpayers,” Garrett Watson, director of policy analysis at the Tax Foundation, told CNBC, depending on withholding and which provisions apply to a filer’s situation.

The slower filing pace has left tax experts debating what is holding people back. “I don’t think there is a universal explanation, but a lot of potential factors,” Mark Mazur, a former top Treasury official in the Biden administration, told Politico.

Among the possible culprits: confusion over the new tax breaks, the growing share of taxpayers who expect to owe money rather than receive refunds, a historically powerful blizzard in the Northeastern US during the latter part of February, and a continued shift towards people filing closer to the April 15 deadline. Filing extension requests lodged by February 28 were up 13% from the same point last year, according to Politico.

While it's unclear whether the average refund this year will rise by $1,000, as the White House projected in January, some of the biggest boosts in refunds may still lie ahead. Citing a Piper Sandler research note, Politico reported that the average payment could rise by $740 by the end of filing season.

“[W]e are still far from seeing the full impact of recent tax change,” the note said.