Having a son who works for H&R Block has its perks: 23-year-old Carl Matthew Moral handled his parents’ filings and estimated a $3,700 refund. His father, Jimmy Moral, plans to put the money toward a new car for his son.
Tax Day, April 15, is less than two weeks away, and many early filers are seeing larger refunds. The average refund so far this year is $3,521, up about 11% from the same time last year, according to IRS filing-season statistics for the week ending March 27, 2026. Those figures could shift as more returns are processed.
The increase is largely tied to the Republican tax changes in the 2025 One Big Beautiful Bill Act, which so far account for roughly a $350 boost on average. That law expanded the standard deduction, increased the child tax credit and added deductions for tips and overtime.
“There is a kind of sugar-rush effect,” says David Tinsley, senior economist at the Bank of America Institute. Early filers have spent more on discretionary categories — electronics, hotels, lodging and restaurants — compared with a year earlier, according to Bank of America’s consumer card data.
But refunds aren’t all splurges. The same data show people using refunds to pay down credit card debt, build savings and cover essentials like groceries and rent. A LendingTree survey found about two-thirds of filers said their refund was very or somewhat important to their financial situation, and an increasing share say they rely on that money. “People aren’t just going out and blowing their tax refund on fun and existing stuff,” says Matt Schulz, LendingTree’s chief consumer finance analyst. “They’re generally putting it toward essentials.”
Some recipients say larger refunds are being eaten up by higher gasoline costs. Sarah Granderson, a recent Jacksonville State University graduate, invested her $400 refund in stocks but says it felt like the money went straight back to filling her car. Researchers at the Stanford Institute for Economic Policy Research estimated households could pay about $740 more for gas this year under certain assumptions — a forecast that already factored in temporary supply disruptions that have continued.
Although refunds are higher year-over-year, the bump is smaller than Bank of America Institute analysts had expected; they had forecast about a 25% increase. “It’s still net positive, but it’s probably not as positive as people were hoping for,” Tinsley says. Timing and the fact that many taxpayers have yet to file could affect averages, but IRS week-over-week comparisons account for that by matching the same point in last year’s season.
If you’re deciding how to use a refund, personal finance experts offer guidance:
– Pay off highest-interest debt first, typically credit cards, says Mandi Woodruff, host of the Brown Ambition podcast. High interest can make that debt the most damaging to your finances.
– Build or top up an emergency fund to cover three to six months of expenses, recommends Rich Guerrini, head of PNC Wealth Management. “This is a big, big priority,” he says.
– Consider investing in the market or in yourself — for example, a certificate course that could raise future earnings. Guerrini notes investing in your skills can yield strong returns.
– It’s also reasonable to use a portion of a refund for a treat while allocating the rest to debt or savings. “Just because you have debt doesn’t mean you’re not a human being who deserves some time off,” Woodruff says.