/images/2023/09/14/woman_using_laptop.jpg)
/images/2019/12/06/smart_strategies_to_save_money_on_car_insurance.jpg)
:format(webp)/images/2026/04/24/president-donald-trump_1.jpg)
/authors/jordan-major-headshot.jpg)
/authors/becca-headshot.jpg)
Add Us On Google
Tax season was supposed to deliver a noticeable boost for American households. After passing sweeping changes under the "Working Families Tax Cuts" law, Donald Trump and his administration promoted the idea that taxpayers would see refunds rise by $1,000 or more.
New data from the Internal Revenue Service tells a different story. Refunds have increased, but the average gain is closer to a few hundred dollars more than the previous year, leaving many taxpayers wondering where the rest of that promised boost went and how to supplement that income.
Get instant access to hundreds of discounts
Over 50? Join AARP today— because if you’re not a member you could be missing out on huge perks like discounts on travel, dining, and even prescriptions.
Get 25% off membership — just $15 for your first year with auto-renewal — and a free gift if you join today.
What the latest refund numbers show
As of mid-April, the average refund sits at about $3,397, up from roughly $3,055 at the same time last year. That works out to about $342, or roughly an 11% increase year over year, according to IRS filing data.
The numbers confirm that refunds are higher, but they fall well short of the $1,000 increase that had been widely discussed. With most returns already filed by this point in the season, there is little indication that the average will climb enough to close that gap.
The result is a shortfall of around $600 compared to what many taxpayers were led to expect.
Why the gap between promises and reality exists
Several factors help explain why the increase is smaller than projected. Refunds naturally fluctuate from year to year based on income levels, withholding, and changes in tax law. The administration's projections appear to have assumed a broader and more uniform impact than what actually materialized.
Higher-income taxpayers are seeing larger gains on average, which pulls the overall refund number upward. As a result, the "average" increase does not necessarily reflect what a typical middle-income filer experiences.
In practice, many households are seeing only modest changes, even though the headline number suggests something bigger.
New tax deductions
The tax law introduced several new deductions that are affecting returns. More than 53 million filers have claimed at least one of the new provisions, including deductions tied to tip income, overtime earnings, senior tax breaks, and auto loan interest. Treasury data shows those taxpayers have seen an average tax reduction of about $800.
Those savings can show up either as a larger refund or a lower tax bill. In some cases, the benefit is spread across paychecks throughout the year rather than appearing as a single lump sum at tax time.
That distribution makes the impact less visible, even when the underlying tax liability has been reduced.
Resolve $10,000 or more of your debt
National Debt Relief could help you resolve your credit card debt with an affordable plan that works for you. Just tell them your situation, then find out your debt relief options.1 <p>Clients who complete the program and settle all debts typically save around 45% before fees or 20% including fees over 24–48 months, based on enrolled debts. “Debt-free” applies only to enrolled credit cards, personal loans, and medical bills. Not mortgages, car loans, or other debts. Average program completion time is 24–48 months; not all debts are eligible, and results vary as not all clients complete the program due to factors like insufficient savings. We do not guarantee specific debt reductions or timelines, nor do we assume debt, make payments to creditors, or offer legal, tax, bankruptcy, or credit repair services. Consult a tax professional or attorney as needed. Services are not available in all states. Participation may adversely affect your credit rating or score. Nonpayment of debt may result in increased finance and other charges, collection efforts, or litigation. Read all program materials before enrolling. National Debt Relief’s fees are based on a percentage of enrolled debt. All communications may be recorded or monitored for quality assurance. In certain states, additional disclosures and licensing apply. ©️ 2009–2025 National Debt Relief LLC. National Debt Relief (NMLS #1250950, CA CFL Lic. No. 60DBO-70443) is located at 180 Maiden Lane, 28th Floor, New York, NY 10038. All rights reserved. <b><a href="https://www.nationaldebtrelief.com/licenses/">Click here</a></b> for additional state-specific disclosures and licensing information.</p>
Sign up for a free debt assessment here.
Refunds don't tell the whole story
A refund is not a direct measure of how much someone saved under a tax law. It reflects how much tax was withheld during the year relative to what was actually owed. If withholding adjusts to reflect lower tax liability, the refund may not increase much at all.
Many taxpayers end up receiving some of their tax savings in smaller increments throughout the year instead of seeing it all at once. That dynamic can make it feel like the promised boost never arrived, even if some benefit was delivered.
Expectations were set unusually high
The White House described the changes as delivering the "largest tax refund season in U.S. history," with projections that refunds would rise by $1,000 or more. Republican lawmakers and administration officials echoed that claim, emphasizing it as a key benefit for voters.
Estimates from groups like the Tax Foundation also suggested refunds could reach higher levels, with projections around $3,800 for the 2025 tax year.
Those expectations created a benchmark that current data has not met, making the actual increase feel smaller than it might otherwise have.
Rising costs are reducing the impact
Even when refunds are higher, the broader economic environment is limiting how much they help.
Gas prices have climbed back above $4 per gallon in many areas, while food, electricity, and other essential expenses remain elevated. Those costs absorb much of the additional money households receive during tax season.
For many families, the extra $300 or so is quickly offset by higher monthly bills. That makes it harder to feel any meaningful improvement in day-to-day finances.
How Americans are using their refunds
Spending patterns also reflect the financial pressure many households are under. About 23% of filers plan to use their refund to pay down credit card debt, while a similar share intends to save the money. Those choices suggest a focus on stability rather than discretionary spending.
Even with slightly larger refunds, many households are using the funds to catch up rather than move ahead.
The political stakes behind the numbers
Refund expectations have taken on added importance as midterm elections approach, with Republican lawmakers highlighting the tax cuts and rising refunds as evidence that the policy is working.
At the same time, the smaller-than-expected increase could make it harder to translate those gains into a clear political advantage. Affordability remains a top concern for voters, and the difference between a $300 increase and a $1,000 increase can shape how those policies are perceived.
Bottom line
Donald Trump's tax plan was expected to deliver roughly a $1,000 boost to refunds, but early data shows the average increase is closer to $300.
The gap, combined with higher everyday costs, helps explain why many taxpayers aren't feeling much relief this filing season. Even with larger refunds on paper, the real-world impact remains limited, leading some households to look for ways to pocket extra cash.
More from FinanceBuzz:
- 7 things to do if you’re barely scraping by financially.
- Find out if you're overpaying for car insurance in just a few clicks.
- Make these 7 savvy moves when you have $1,000 in the bank.
- 14 benefits seniors are entitled to but often forget to claim
/images/2021/04/21/adobestock_192812280_1200x628.jpg)
/images/2019/12/06/smart_strategies_to_save_money_on_car_insurance.jpg)
/images/2025/01/28/adobestock_628402894_1.jpeg)
/images/2024/09/04/adobestock_669069249_editorial_use_only_1.jpeg)
/images/2020/03/02/tattoo-woman-bar.jpeg)
/images/2020/12/21/smiling-couple-looking-at-laptop-screen.jpeg)
Intro Offer
Discover will match all the cash back you’ve earned at the end of your first year.
Annual Fee $0 Why we like it
/images/2025/01/23/discover_it_cash_back_card_art_gold.png)
/images/2022/04/20/senior-couple-happy-laptop-computer.jpg)
/images/2022/02/04/woman_with_lottery_ticket.jpg)
/images/2021/05/05/happy-young-investor.jpg)
/images/2025/12/31/internal-revenue-service-sign.jpg)
/images/2026/02/17/donald-trump_2.jpg)
/images/2025/12/03/internal-revenue-service-building.jpg)
/images/2026/02/04/donald-trump_1.jpg)
/images/2026/01/21/internal-revenue-service-sign_1.jpg)
/images/2024/04/21/managing-bank-finances-calculating-taxes.jpg)
/images/2025/08/22/elderly-man-smiling-face-expression.jpg)
/images/2025/08/18/5330-fashion-vlogger.jpg)
