BIRMINGHAM, Ala. — Early spring brought sunshine and taxes. At a recent picnic in Railroad Park, Dan and Glynna Courter and their friends compared refunds and mostly shrugged. The Courters received about $10,000 combined — they withhold generously from paychecks to avoid owing — but Glynna said it didn’t feel much different from last year. “We might go to a nice restaurant,” Dan said, after Glynna added they’d put the money in savings.
That muted reaction contrasts with a White House claim that this is the “largest tax refund season in U.S. history.” The administration projected the average refund would rise by $1,000 or more under the Republicans’ 2025 tax and spending law, the One Big Beautiful Bill Act. So far, that boost has fallen short.
By early April, the IRS reported the average refund at $3,462, about $350 higher than a year earlier and an 11.1% rise compared with the same point last year. Experts say the headline $1,000 bump hasn’t materialized for most taxpayers.
A Bipartisan Policy Center poll found 62% of respondents said the tax changes either harmed them or made no difference; only 35% of Republicans said the changes favored them. “There’s a bit of a disappointment in how much those refunds are,” said Tom O’Saben, director of tax content and government relations at the National Association of Tax Professionals. “People are quietly, perhaps, happy but not to the extent where I would call it significant.”
One reason is that some benefits from the tax law may be flowing more to filers who would otherwise owe taxes, rather than to those receiving refunds. IRS refund figures don’t show reductions in what people owe, which can make relief less visible. “The evidence is stronger that more tax relief is relatively flowing to those who otherwise would owe when they file,” said Don Schneider, deputy head of U.S. policy at Piper Sandler. But he noted that owing less is harder for taxpayers to notice than getting a cash refund.
Higher-income taxpayers also appear to be reaping larger gains. Andrew Lautz, director of tax policy at the Bipartisan Policy Center, said wealthier filers are more likely to report significantly higher refunds this year. That is partly due to a raised cap on the state and local tax (SALT) deduction: the One Big Beautiful Bill Act increased the SALT cap to $40,000 for property, sales and income taxes paid to state and local governments. The deduction tends to benefit homeowners with large mortgages — generally higher-income taxpayers.
Because higher-income filers often file later in the season, the average refund could grow later on, Lautz said, but he expects it will still fall short of the additional $1,000 the White House forecast.
Another factor blunting the feel-good effect of refunds is higher consumer costs, especially gasoline. The war with Iran pushed the national average price for a gallon of regular well above $4. Data from Bank of America Institute and PNC show steady spending on gas; if prices stay elevated, any extra cash from refunds could be absorbed by fuel costs. “The tax refund season might be very good but it’s also being offset by this price in gasoline,” said Michael Pearce, chief U.S. economist at Oxford Economics.
Some retirees and other filers are saving refunds out of concern about rising costs. Bob Jones, a retiree in Birmingham who benefited from an extra $6,000 deduction for seniors 65 and up, said he put his refund into savings because of worries about gasoline prices: “You need the savings simply for gas,” he said.
Overall, while average refunds are higher than last year, the increase has been smaller than projected, the gains appear uneven across income groups, and higher living costs are muting taxpayers’ enthusiasm.