As tax season unfolds, the IRS has revealed a significant 29% decrease in average tax refunds for 2024 compared to the previous year, according to International Business Times. However, experts caution against alarm, emphasizing the fluidity of these figures and the potential for change as the filing season progresses.
Initial Decrease in Average Tax Refunds for 2024 Raises Eyebrows
With over 2.6 million refunds issued, totaling $3.65 billion as of February 2nd, taxpayers are seeing an average refund of $1,395, marking a notable drop from the $1,963 average refund observed last year—a decrease of roughly 29%.
IRS officials attribute this decrease to a smaller sample size and a delayed start to the 2024 tax season, cautioning against drawing hasty conclusions from the current data.
Despite the initial decline, experts anticipate potential increases in refund sizes as more returns are processed and certain delayed refunds, particularly those involving tax credits, are released.
Factors Contributing to Decrease in Average Tax Refunds for 2024
Under the Protect Americans from Tax Hikes Act of 2015, there may be delays in handling returns for tax credits like the earned income tax credit and the child tax credit. This could be affecting the stated average refund amounts.
Proposed legislative changes, including bills aimed at modifying the child tax credit, could further impact refund amounts for eligible taxpayers.