Tax Refunds Surge: Average Checks Climb and Many Plan to Pay Down Debt

Early-season figures show tax refunds are materially larger this year, and many households already have plans for how to use the windfall. Growing refunds could strengthen household balance sheets, but the distribution of that benefit is uneven across the population.

Tax Refund Trends and what filers are planning

Survey findings from this month indicate the most common use of refunds remains paying down debt. About 36% of respondents said they plan to use their IRS refund to pare debt, while roughly 10% plan to make a major purchase or cover everyday expenses, and about 13% expect to put the money into savings. Meanwhile, approximately 32% of respondents do not expect to receive any refund this year.

These stated intentions mirror patterns from last year: during the 2025 tax season, about 34% of consumers said they planned to use refunds to erase debt. That continuity suggests that for many households, refund checks remain an opportunity to address elevated balances rather than to fund discretionary spending.

How much bigger are refunds and who benefits

So far in the filing season, refunds are roughly 14% higher than at the same point last year, based on tax agency data. Wall Street estimates indicate the typical check could be about 30% larger than a year ago, which would translate to an extra $1, 000 and lift the typical refund to about $4, 000 on a dollar basis.

Those larger averages are likely to be driven in part by higher-income filers, who tend to file later in the season and often receive larger refunds. Refund amounts typically rise as the season progresses because these later filers are included closer to filing deadlines, which can skew mid-season averages upward.

Impact on household finances and outlook

Household debt has reached new records in recent months, with Americans relying more on credit cards for everyday expenses and taking out larger loans amid rising car and home prices. Given that context, the prevalence of plans to apply refunds toward debt reduction could provide meaningful relief for many households carrying higher balances.

Separate institute research looking at the period from 2023 to 2025 found that low- and middle-income households tended to keep at least a portion of their refund funds in bank accounts for six months or longer. Larger refunds this season could therefore both improve short-term liquidity and strengthen savings buffers for some households.

Still, the gains are not universal. With about one-third of survey respondents expecting no refund, the larger-average narrative does not apply to all filers. That split underlines how headline increases in averages can mask diverging experiences across income groups and filing situations.

What to watch as the filing season continues

• Filing rhythm: Refund averages often change as more returns are filed later in the season; later filings by higher-income households can lift the average refund size.
• Spending vs. debt reduction: Current survey responses show debt repayment remains the top planned use of refunds, which could moderate near-term consumer spending despite larger average checks.
• Savings behavior: Prior findings suggest some households keep refund money in accounts for months, so larger refunds this year may translate into higher short-term savings for segments of the population.

Recent updates indicate these dynamics are still evolving as the tax season progresses. Details may change as more returns are processed and additional data becomes available.