Average Tax Refund Rises To $3,116 In 2025

As the tax deadline approaches, the Internal Revenue Service (IRS) reports that over 101 million tax returns have been filed for the 2025 season.

The average refund has increased to $3,116, marking a 3.5% rise from the previous year.

Despite a 0.4% decrease in total returns received compared to the same period last year, the IRS has processed over 100 million returns. The total amount refunded has reached $211.1 billion, a 5% increase from 2024.

Based on the trends we’re seeing for consumers, the decline in tax refunds isn’t surprising. It felt like a lot of Americans have been caught of guard this tax season, and we’re seeing a rush of people exploring tax software options today.

The majority of taxpayers are opting for direct deposit, with 97% of refunds issued electronically. The average direct deposit refund stands at $3,186, up 3.2% from the previous year. 

Filing Deadline and Extension Options

Taxpayers must file their 2024 income tax returns or request an extension by April 15, 2025. Filing an extension grants six additional months to file (until October 15) but does not extend the time to pay.

The IRS offers various methods to file for an extension, including the IRS Free File program, mailed Form 4868, or online payment with the “extension” reason. Those failing to file or pay on time may incur penalties, so experts recommend conservative tax estimates

Unclaimed Refunds and Credits

The IRS is urging approximately 1.1 million Americans to file their 2021 tax returns by April 15, 2025, to claim a share of over $1 billion in unclaimed tax refunds. The median refund is estimated at $781.

It’s important for Americans to remember that they have three years to claim a tax refund – after that point, it’s gone. If you haven’t filed a tax return in the last three years, you may want to in order to claim any missing tax refund payments you’re owed.

Final Thoughts

As the tax season ends, the increase in average refunds can provide a financial boost for many Americans.

However, the shift in how these refunds are utilized highlights ongoing economic concerns and the importance of strategic financial planning. Lower total returns filed means many Americans may feel like they’re struggling financially. A tax return is simply added pressure they can’t handle at the moment.

For people receiving large refunds (over $3,000), now’s a good time to change your withholding to get more money in your paycheck every month.

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Methodology

This analysis uses data from Internal Revenue Service (IRS): the Filing Season Statistics based on the latest date of April 4, 2025.