The IRS released its latest statistics for this tax season Friday, and the size of the average tax refund is now in line with 2018 levels. The average refund is now $3,008, which is 0.1% higher than the average 2018 return of $3,004.
The latest statistics will likely be a relief to those who haven’t yet filed their returns. For weeks, the size of the average refund was down, hitting a season low of nearly 17% in mid-February. Just a week later, the refund amounts quickly rebounded 19%, buoyed by child care and income tax credits that were filed halfway through the month.
But despite the uptick in refunds — they were up 1.3% over the year prior by the end of February — the average refund has started to shrink again, and is now flat with returns filed in 2018.
With tax season now in its last month, Americans are starting to see how the new Tax Cuts and Jobs Act has impacted their taxes owed, as well as if and how much they get back. Some have complained their refunds are lower, while others have been hit with surprise tax bills.
Studies show that tax refunds are a major financial event for Americans, serving as a reset to most families’ spending and saving habits. If refunds are smaller, families might need to make adjustments this year to account for the loss.
As a result, there are concerns that consumer spending will be impacted as households may get back less money than they had anticipated. It is estimated that two-thirds of Americans will receive a tax cut — a net gain — but not at tax time. Many people saw increases in their paychecks throughout the year but simply didn’t notice.
Despite average tax refunds remaining in line with previous years, total refunds are down. The amount the IRS has sent out in total refunds to U.S. taxpayers so far this year has shrunk more than 3% to $160.8 billion, from nearly $166.2 billion in 2018. The number of returns received and processed has also fallen, as the IRS works to make up for lost time after a month-long government shutdown that closed the Treasury Department.
Kristin Myers is a reporter at Yahoo Finance. Follow her on Twitter.