BIRMINGHAM, Ala. — Early spring brought sunshine and tax-season talk at Railroad Park, but the mood was muted. Dan and Glynna Courter and their friends compared refund totals and mostly shrugged. The Courters received roughly $10,000 combined — a result of generous withholding — but said it didn’t feel noticeably different from last year. “We might go to a nice restaurant,” Dan said, after Glynna added they planned to put the money into savings.
That low-key reaction contrasts with the White House’s claim that this is the “largest tax refund season in U.S. history.” The administration had projected the average refund would rise by about $1,000 under the Republicans’ 2025 tax and spending law, the One Big Beautiful Bill Act. So far, that bump hasn’t appeared for most filers.
By early April, IRS data put the average refund at $3,462 — roughly $350 higher than a year earlier and an 11.1% increase compared with the same point last year. Analysts say the headline $1,000 increase has not materialized broadly.
A Bipartisan Policy Center poll found 62% of respondents said the tax changes either hurt them or made no difference, and only 35% of Republicans reported benefiting. “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.”
Part of the explanation is that some of the law’s relief is reducing what people owe rather than increasing refunds, which is less visible in IRS refund totals. “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. He noted that paying less tax due is harder for taxpayers to notice than receiving a check.
Higher-income households also appear to be capturing a disproportionate share of gains. Andrew Lautz, director of tax policy at the Bipartisan Policy Center, said wealthier filers are more likely to report substantially larger refunds this year. One factor is an increased cap on the state and local tax (SALT) deduction: the One Big Beautiful Bill Act raised the SALT cap to $40,000 for property, sales and income taxes paid to state and local governments, a change that tends to benefit homeowners with large mortgages.
Because higher-income taxpayers often file later, the average refund could increase as the season continues, Lautz said, but he expects it will still fall short of the $1,000-per-taxpayer boost the White House forecast.
Rising living costs are also muting any windfall feeling. The spike in gasoline prices after the war with Iran pushed the national average for a gallon above $4, and data from Bank of America Institute and PNC show steady spending on gas. “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 have stashed refunds for precautionary reasons. Bob Jones, a Birmingham retiree who benefited from an extra $6,000 deduction for taxpayers 65 and older, said he saved his refund because of worries about gas prices. “You need the savings simply for gas,” he said.
In short, average refunds are up from last year but by less than projected, the gains are uneven across income groups, and higher everyday costs are dampening taxpayers’ enthusiasm.