Average Tax Refund Is Up 10.2% This Year. Here's What That Means for CPAs.

Average tax refunds are up 10.2% this year - and the total amount the IRS has refunded so far is running $7 billion ahead of last year's pace.

According to the Tax Foundation's filing season tracker (updated March 3), the average refund as of the third week of reporting hit $3,804 - up from $3,453 at the same point in 2025. And the total amount refunded so far is $109.3 billion, compared to $102.3 billion last year.

For CPAs managing client expectations during busy season, those numbers are useful benchmarks. But they're also a reminder that 2026 refunds are being driven by policy changes - not economic trends.

Why Refunds Are Bigger This Year

The One Big Beautiful Bill Act introduced a pile of new deductions that are showing up in refund checks right now:

Bigger standard deduction: $15,750 for single filers (up from $14,600 in 2025), $31,500 for joint filers (up from $29,200).

Higher child tax credit: $2,200 per dependent, up from $2,000.

New charitable deduction for non-itemizers: Up to $1,000 for single filers, $2,000 for joint filers - previously only available to those who itemized.

SALT cap increase: The state and local tax deduction cap jumped to $40,000 (from $10,000 for most filers), which is driving larger refunds for high-income itemizers in high-tax states.

Three "no tax on" provisions: Tips, overtime, and auto loan interest deductions are eliminating federal income tax on qualifying amounts - though the rules are more complex than the campaign slogans suggested.

The Tax Foundation estimates an additional 5 million people will itemize this year, bringing the total to 23 million filers (about 12% of all returns) - driven largely by the SALT cap increase.

What the Data Says About Filing Pace

The Tax Foundation is tracking three key metrics this season: number of returns processed, total amount refunded, and average refund size.

As of the third week (late February), here's where things stand:

Total refunded: $109.3 billion (vs. $102.3 billion last year) - up 6.8%

Average refund: $3,804 (vs. $3,453 last year) - up 10.2%

Share of filers getting refunds: Likely to climb higher than the ~65% seen in 2024 and 2025, given the expanded deductions.

For CPAs benchmarking their own practice pace, these numbers suggest early filers are skewing toward refund-claimers (as usual) - which means balance-due clients are likely waiting until closer to April 15.

What This Means for Client Conversations

If clients are asking "where's my refund?" or "why is mine smaller than my neighbor's?", the $3,804 average is a useful data point - but only as a starting point.

Average refunds vary wildly based on income, deductions, and timing. Early filers claiming Schedule 1-A deductions (tips, overtime, seniors, car loans) are seeing larger-than-average refunds. High-income itemizers benefiting from the SALT cap increase are seeing even bigger jumps.

But taxpayers who don't qualify for the new deductions - or who had withholding adjustments during the year - might see refunds that are flat or even down compared to 2025.

The key message: refund size is a function of withholding and deductions, not a measure of tax burden. A smaller refund might mean a client did a better job managing their withholding throughout the year, not that they paid more in taxes.

One More Thing: Refund Timing

The IRS is phasing out paper checks this year, which means refunds for filers who don't provide direct deposit info could take up to six weeks to arrive - double the normal timeline for e-filed returns.

If clients are waiting longer than usual, that might be why. And it's a good opportunity to remind them to update their banking info for next year.

The Tax Foundation's tracker will keep updating weekly through the end of filing season. But the big picture is already clear: refunds are up, filings are on pace, and the OBBBA is doing exactly what it was designed to do - put more money back in taxpayers' pockets.

Whether that translates into economic growth or just shifts the timing of when people pay their taxes is a question for later. For now, CPAs have data to work with - and clients to keep informed.