While the average tax refund amount is only slightly lower than 2019, the tax agency has doled out nearly more than 1.1 million fewer refunds, about 3 percent less than last year, despite the fact that about the same number of returns had been received.
Still, Treasury Secretary Steven Mnuchin is touting success for those who have received their refunds – with the average check totaling more than $3,100.
“Nearly 50 million taxpayers have filed tax returns and have received over $117 billion of their money back in tax refunds,” Mnuchin said in a statement. “Taxpayers are seeing an average of $3,125 per refund, a significant return for hardworking Americans across the country.”
At the same period last year, the average refund check was $3,143.
The most recent data includes refunds for individuals who claimed the Earned Income Tax Credit, which are legally held until February 15. It only covers the first four weeks of tax season and is subject to change.
Mnuchin’s 2020 rhetoric differs markedly from last year, when the administration scrambled to quell fears over refund confusion. Last year was the first filing under the sweeping changes enacted via the Tax Cuts and Jobs Act. Many people did not check their withholding amounts leading into last tax season despite the government’s advice to do so. As a result, many people were upset when they received little or no refunds despite having a similar financial situation to the year prior. Some even owed the tax agency for the first time.
At the time, the administration sought to remind taxpayers that the size of their refund did not correlate with whether they had received an overall benefit from the 2017 tax reform law.
The ultimate goal of proper withholding is to pay enough each month that you neither owe taxes, nor are owed a refund come April.
So far, the IRS data appears to include more individuals who self-prepared their returns. Those instances up nearly 3 percent when compared with the same period last year. These tend to be individuals with simpler financial situations.
Returns filed by tax professionals on the other hand, were down 2.8 percent.