Key Takeaways
- The average 2026 federal tax refund is $3,676 as of early March -- up 10.6% from $3,324 at the same point in 2025.
- OBBBA deductions for tips (up to $25,000), overtime (up to $12,500), auto loan interest on American-made vehicles, and a new senior deduction are the primary reason refunds are larger.
- About 70% of returns filed in 2026 received a refund -- up from roughly 63% in prior years.
- Florida ($3,852), Texas ($3,774), and Wyoming ($3,720) have the highest average federal refunds by state; Maine ($2,656), Wisconsin ($2,737), and Oregon ($2,772) have the lowest.
- Most e-filed state returns process in 2-6 weeks; paper returns take 6-12 weeks in most states. Georgia (up to 90 days e-file) and California (up to 3 months paper) are outliers.
The average federal tax refund as of March 6, 2026 was $3,676 — up 10.6% from $3,324 at the same point in 2025. By early April the average settled to $3,462, still up 11.1% year-over-year. The IRS has paid out $241.7 billion in refunds through early April, compared to $211.1 billion in 2025 — a $30.7 billion jump.
The driver is the One Big Beautiful Bill Act (OBBBA). New deductions for tips, overtime, and auto loan interest applied to 2025 income, but IRS withholding tables weren’t updated in time, leaving millions of workers over-withheld all year. The refund is the correction.
Why 2026 Refunds Are Running Higher
The One Big Beautiful Bill Act (OBBBA), passed in 2025, introduced several deductions that took effect for the 2025 tax year — the income year covered by returns filed in 2026.
No tax on tips (up to $25,000): Workers who received tips can deduct up to $25,000, with a phase-out above $150,000 (single) / $300,000 (joint). This is a major change for servers, bartenders, hotel workers, and anyone else in tip-heavy jobs.
No tax on overtime (up to $12,500): Overtime pay is deductible up to $12,500 per person, same income thresholds. Factory workers, nurses, first responders, and anyone who worked significant overtime in 2025 sees this directly.
Auto loan interest on American-made vehicles: Interest on car loans for U.S.-manufactured vehicles is now deductible — the first time car loan interest has been deductible for most taxpayers since the 1980s.
Senior citizen deduction: A new additional deduction for taxpayers 65 and older provides meaningful relief for retirees who don’t otherwise itemize.
The over-withholding effect: the IRS didn’t update employer withholding tables before the 2025 tax year started. So employers withheld taxes all year as if those deductions didn’t exist. The refund corrects the overpayment.
Example — Sarah, restaurant server: Sarah earned $52,000 in 2025, including $18,000 in tips. Her employer withheld taxes on the full $52,000. She can now deduct the $18,000 in tips, reducing her taxable income to $34,000. At a 22% rate, that’s roughly $3,960 she overpaid — showing up as a larger refund.
Example — Mark, manufacturing worker: Mark earned $65,000, with $9,000 from overtime, and paid $2,400 in interest on a loan for his American-made truck. He can deduct both — $11,400 total — reducing taxable income at a 22% rate by about $2,500.
Will 2027 refunds be this large? Probably not. The IRS updated withholding tables for 2026 income to reflect the OBBBA rules, so workers will be withheld more accurately going forward. Smaller refunds next year means more take-home pay throughout 2026 — the money arrives in paychecks instead.
Average IRS Federal Tax Refund by Year
| Filing Season | Tax Year | Average Refund (Mid-Season) | Approx. Year-End Average | Change |
|---|---|---|---|---|
| 2026 | 2025 | $3,676 (Mar 6) / $3,462 (Apr 3) | Est. ~$3,100-$3,200 | +10-11% |
| 2025 | 2024 | $3,324 (Mar 7) | ~$2,939 | +2.4% |
| 2024 | 2023 | ~$3,011 | ~$2,869 | +4.8% |
| 2023 | 2022 | ~$2,933 | ~$2,753 | -9.4% |
| 2022 | 2021 | ~$3,263 | ~$3,039 | +10.7% |
| 2021 | 2020 | ~$2,880 | ~$2,775 | +14.5% |
Sources: IRS Weekly Filing Season Statistics; IRS Statistics of Income. Mid-season figures are snapshots from early March each year. Year-end figures reflect final IRS SOI data. 2026 year-end is a projection based on mid-season pace.
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Average Federal Tax Refund by State (50 States)
The table below uses the most recent available IRS Statistics of Income data, from the 2025 filing season (tax year 2024). The IRS does not release state-level SOI data until well after year-end, so 2026 state figures are not yet available. Given the national 10-11% increase, actual state averages this year are likely running proportionally higher across the board.
Florida, Texas, Nevada, Wyoming, South Dakota, Washington, Tennessee, New Hampshire, and Alaska have no state income tax. Their federal refund averages still apply — residents file federal returns — but there is no state income tax refund in these states.
| Rank | State | Avg Federal Refund (2025 filing season) |
|---|---|---|
| 1 | Florida | $3,852 |
| 2 | Texas | $3,774 |
| 3 | Wyoming | $3,720 |
| 4 | Nevada | $3,643 |
| 5 | Louisiana | $3,577 |
| 6 | Georgia | $3,574 |
| 7 | Mississippi | $3,491 |
| 8 | Illinois | $3,394 |
| 9 | Connecticut | $3,362 |
| 10 | Alabama | $3,357 |
| 11 | California | $3,344 |
| 12 | New York | $3,339 |
| 13 | Massachusetts | $3,327 |
| 14 | New Jersey | $3,317 |
| 15 | Washington | $3,310 |
| 16 | Maryland | $3,242 |
| 17 | Arkansas | $3,224 |
| 18 | Virginia | $3,217 |
| 19 | Oklahoma | $3,213 |
| 20 | Utah | $3,210 |
| 21 | Alaska | $3,206 |
| 22 | Tennessee | $3,192 |
| 23 | Arizona | $3,179 |
| 24 | Colorado | $3,142 |
| 25 | New Hampshire | $3,091 |
| 26 | North Dakota | $3,077 |
| 27 | North Carolina | $3,063 |
| 28 | Delaware | $3,048 |
| 29 | Michigan | $3,047 |
| 30 | Idaho | $3,040 |
| 31 | Indiana | $3,028 |
| 32 | South Carolina | $3,020 |
| 33 | Hawaii | $3,011 |
| 34 | Pennsylvania | $3,011 |
| 35 | South Dakota | $3,004 |
| 36 | Kansas | $3,000 |
| 37 | Missouri | $2,991 |
| 38 | Nebraska | $2,935 |
| 39 | Iowa | $2,924 |
| 40 | Kentucky | $2,922 |
| 41 | New Mexico | $2,912 |
| 42 | Ohio | $2,874 |
| 43 | Rhode Island | $2,871 |
| 44 | Montana | $2,870 |
| 45 | Minnesota | $2,838 |
| 46 | West Virginia | $2,834 |
| 47 | Vermont | $2,816 |
| 48 | Oregon | $2,772 |
| 49 | Wisconsin | $2,737 |
| 50 | Maine | $2,656 |
Source: IRS Statistics of Income, 2025 filing season (tax year 2024). 2026 state-level data will be updated when the IRS releases its annual SOI report.
Why Do States Vary So Much?
The main driver is whether the state has an income tax. Florida, Texas, Nevada, and Wyoming rank in the top 5 — and all have no state income tax. Without state withholding reducing paychecks, workers often don’t adjust their federal W-4 allowances, leading to systematic federal over-withholding and higher average federal refunds.
The lowest-refund states — Maine, Wisconsin, Oregon — tend to have higher state taxes and more integrated withholding, so federal withholding ends up more accurate and refunds are smaller. A small refund isn’t a bad outcome; it means your money was in your pocket during the year.
The EITC and Child Tax Credit also play a role. States with more lower-income households have higher EITC usage, which significantly inflates the average refund. Mississippi ranks 7th nationally in part because over 22% of filers there claim the EITC.
State Tax Refund Processing Times (2026)
Your state income tax refund is separate from your federal refund. The IRS and state departments of revenue process returns independently — a fast federal refund tells you nothing about how long your state will take.
| State | E-File Processing | Paper Return | Notes |
|---|---|---|---|
| Alabama | 2-6 weeks | 8-12 weeks | |
| Alaska | No state income tax | N/A | |
| Arizona | 2-6 weeks | 8-12 weeks | |
| Arkansas | 2-6 weeks | 6-12 weeks | |
| California | 2-3 weeks | Up to 3 months | High volume; paper returns notoriously slow |
| Colorado | 2-6 weeks | 6-12 weeks | |
| Connecticut | 2-3 weeks | 6-10 weeks | |
| Delaware | 10-12 weeks | 12-16 weeks | Longer than average for e-file |
| Florida | No state income tax | N/A | |
| Georgia | Up to 90 days | Up to 6 months | Longest standard e-file window of any major state |
| Hawaii | 7-8 weeks | 9-10 weeks | |
| Idaho | 7-8 weeks | 10-11 weeks | Fraud review on every return |
| Illinois | 2-3 weeks | 6-8 weeks | |
| Indiana | 2-3 weeks | 6-10 weeks | |
| Iowa | ~30 days | ~30 days | Most issued before end of May |
| Kansas | 10-14 business days | 16-20 weeks | Very fast e-file; very slow paper |
| Kentucky | 4-6 weeks | 10-14 weeks | |
| Louisiana | 4+ weeks | 8-16 weeks | Up to 16 weeks if selected for review |
| Maine | ~8 weeks | 8-12 weeks | 60-day statutory window before interest owed |
| Maryland | 2-3 weeks | 6-10 weeks | |
| Massachusetts | 4-6 weeks | 8-12 weeks | |
| Michigan | ~2 weeks | Up to 6 weeks | One of the faster states |
| Minnesota | No fixed window | No fixed window | Tracker updates nightly Mon-Fri |
| Mississippi | 2-6 weeks | 6-12 weeks | |
| Missouri | 2-6 weeks | 6-12 weeks | |
| Montana | 2-6 weeks | 6-12 weeks | |
| Nebraska | 2-6 weeks | 6-12 weeks | |
| Nevada | No state income tax | N/A | |
| New Hampshire | No general income tax | N/A | |
| New Jersey | ~4 weeks | Up to 12 weeks | |
| New Mexico | 2-6 weeks | 6-12 weeks | |
| New York | Up to 3 weeks | Up to 6 weeks | High volume; ID verification common |
| North Carolina | 2-6 weeks | 6-12 weeks | |
| North Dakota | 2-6 weeks | 6-12 weeks | |
| Ohio | 2-6 weeks | 6-12 weeks | |
| Oklahoma | 2-6 weeks | 6-12 weeks | |
| Oregon | 2-6 weeks | 6-12 weeks | |
| Pennsylvania | 4-6 weeks | 8-10 weeks | |
| Rhode Island | 2-6 weeks | 6-12 weeks | |
| South Carolina | Up to 8 weeks | Up to 12 weeks | 2026: SC does not yet conform to OBBBA; delays reported |
| South Dakota | No state income tax | N/A | |
| Tennessee | No general income tax | N/A | |
| Texas | No state income tax | N/A | |
| Utah | 2-6 weeks | 6-12 weeks | |
| Vermont | 2-6 weeks | 6-12 weeks | |
| Virginia | 3-4 weeks | 4-6 weeks | |
| Washington | No state income tax | N/A | |
| West Virginia | 2-6 weeks | 6-12 weeks | |
| Wisconsin | 2-6 weeks | 6-12 weeks | |
| Wyoming | No state income tax | N/A | |
| Washington D.C. | 2-6 weeks | 6-12 weeks |
Sources: State department of revenue websites; updated for 2026. Times reflect standard processing; actual windows may be longer during peak filing season (Feb-April).
For more on federal refund timing, see our 2026 IRS Tax Refund Schedule. If your refund has been offset for a past debt, see our guide on tax refund offsets.