IRS: Average tax refund up $22 compared to last year

IRS: Average tax refund up $22 compared to last year
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The IRS released statistics Thursday showing that the average refund size in the first five weeks of the filing season was up $22 compared to a similar period last year.

The average refund through March 1 was $3,068, which is 0.7 percent more than the average refund of $3,046 through March 2, 2018.

Policymakers have been looking closely at the IRS’s refund data this year, because this is the first time that people are filing their taxes under President TrumpDonald John TrumpDem lawmaker says Electoral College was 'conceived' as way to perpetuate slavery Stanley Cup champion Washington Capitals to visit White House on Monday Transportation Dept requests formal audit of Boeing 737 Max certification MORE’s tax law. Early last year, the IRS released new guidance on withholding from people’s paychecks that reflected major parts of the new law.

The new batch of IRS data is the second batch in a row showing the average refund size up slightly for the year.

The first three batches of IRS data showed a drop in the average refund size compared to similar periods in 2018. But since then, IRS data has showed cumulative average refund amounts that are a bit higher than last year after the IRS processed many returns claiming the earned income tax credit and the refundable child tax credit.

By law, the IRS has to hold refunds claiming those credits until Feb. 15. Returns claiming those credits tend to have larger refunds, and the child tax credit was expanded under Trump’s tax law.

Tax refunds and tax cuts are not the same thing, and most people seeing a smaller refund this year are still seeing a reduction in their tax liability. The size of a taxpayer’s refund depends on the extent to which he or she overpaid in taxes throughout the year.

In total, the Trump administration estimates that about 80 percent of taxpayers will see a tax cut, while about 15 percent will see their taxes remain about the same.

But tax preparers said that their clients have often been focused on their refunds and that increases and decreases in refund size depend on each taxpayer's personal situation. People often use their refunds for savings, to pay off debt or make significant purchases.

The Treasury Department tweeted on Thursday that the average refund size remains “consistent with 2018 refund levels,” and the department recommended that people use the IRS’s resources to determine if they need to adjust their withholding.

The latest batch of data still represents early information about the filing season. The IRS said that it has received about 59 million tax returns through March 1, and the agency expects to receive more than 150 million returns this year.

National Taxpayer Advocate Nina Olson, the IRS’s in-house watchdog, said at a hearing Thursday that it’s “too soon” to provide a full assessment of the filing season, given that it’s only partially completed.