Tax Refunds Are Up 11% — But Your Clients Might Wait Longer to Get Them

Your Clients Are Getting Bigger Refunds — But They Might Wait Longer

The average tax refund just jumped 11% compared to last year. The bad news? The IRS is processing returns 12% slower, and your clients might be waiting a lot longer to see that money.

As of Feb. 6, 2026, the average direct-deposit refund hit $2,290 — up from $2,065 at the same point in 2025, according to IRS data. That's real money. And it's coming from H.R. 1 (the "One Big Beautiful Bill Act"), which packed in a larger standard deduction, an expanded senior deduction, a new auto loan interest deduction, and deductions for overtime and tips.

Sounds great, right?

Except the IRS is falling behind. Way behind.

The Processing Gap Is Real

Here's the problem: While refunds are up, the number of returns actually processed is down 12.3% compared to last year.

The IRS processed 20.6 million returns through Feb. 6, 2026 — down from 23.5 million at the same point in 2025. Meanwhile, returns received dropped only 5.2% (22.4 million vs. 23.6 million).

That's a gap. And gaps mean delays.

Why This Is Happening

Two reasons:

1. IRS workforce cuts. The agency slashed 25% of its staff. That's not a rounding error — that's thousands of people who used to process returns, answer phones, and handle refunds.

2. H.R. 1 complexity. The same tax cuts driving bigger refunds also created more work. New deductions mean more questions, more calculations, more manual reviews. The IRS isn't staffed for this.

Both the Treasury Inspector General for Tax Administration (TIGTA) and the National Taxpayer Advocate warned about this in January. Their prediction: service delays, refund backlogs, and longer wait times on the phone through April 15.

What CPAs Should Tell Clients

Set expectations early. If a client is counting on a refund by a specific date, tell them now that processing is slower this year. The IRS might hold their money longer — not because of an audit, but because they're just behind.

Push e-file + direct deposit. Paper returns are going to sit even longer. E-filing with direct deposit is the fastest path to getting that $2,290.

Explain the H.R. 1 deductions. Clients don't know what they qualify for unless you tell them. The auto loan interest deduction alone can save up to $10,000. The overtime and tip deductions are brand new. Walk them through it.

Don't promise timelines. The IRS used to hit 21-day refund cycles pretty reliably. This year? That's optimistic. Under-promise, over-deliver.

The Bottom Line

Bigger refunds are nice. But they don't matter if your clients are calling you every week asking where their money is.

The IRS is short-staffed, H.R. 1 added complexity, and processing is already lagging. This filing season is going to be messier than usual.

Your job? Manage expectations, push e-file, and explain the deductions so clients actually get what they're owed.

Because a $2,290 refund that shows up in May isn't as good as a $2,065 refund that showed up in February.