Is Uncle Sam being less generous, or is your HR department actually doing withholdings properly this year? Early IRS data reveals a dramatic 32.4% drop in average tax refunds, with checks shrinking to $2.17K compared to $3.21K during the same period last year. However, before taxpayers panic, this early-season dip may not reflect the complete picture of what’s to come.

• The current figures exclude refunds containing earned income tax credits and additional child tax credits, which can’t be issued before mid-February and often result in larger payouts — sometimes reaching five figures.
• Only 33M returns have been processed of the expected 140M, representing just 23.6% of total anticipated filings for the 2025 tax season.

Taxing times: The IRS expects these numbers to “even out” as more returns flow in, particularly from higher-income filers who typically wait until closer to the deadline. Adding another wrinkle to this year’s tax season — recent agency layoffs could impact processing times, making accuracy in filing more crucial than ever. The agency advises double-checking returns for accuracy and utilizing digital tools like their “Where’s My Refund?” tool rather than attempting to contact the IRS directly, as refunds are typically processed within 21 days for electronic submissions.