04 03 2019

Average 2019 Tax Refunds Down Nearly 17 Percent

As tax season continues, the IRS is still reporting smaller refunds.

THE INTERNAL REVENUE Service reported average tax refunds so far this season are nearly 17 percent lower than last year.

As of Feb. 15, the IRS reported a 16.7 percent dip in average federal refunds compared to 2018 – a figure that follows a reported 8.7 percent decline in the average refund size reported in the first two weeks of the season. The data, released late Friday in the agency's latest batch of data about the 2019 tax-filing season, shows the average refund issued in the first three weeks of the 2019 season sits at $2,640, compared to an average return of $3,169 last year.

According to the data, the total number of returns that qualified for refunds was down 26.5 percent compared with last year and the amount of money refunded was down by 38.8 percent.

The IRS has reported a slow start to the tax season that began Jan. 28 and runs through April 15 for most tax payers. The agency reported it has processed 6.6 percent fewer returns compared with last year because of the partial government shutdown, and low filing numbers suggest Americans have been in no rush to submit their taxes.

Late last year, the IRS warned taxpayers about a possible "tax time surprise" for those who didn't pay enough from their paychecks in 2018 in the wake of the Trump administration's revisions to the tax law in 2017. The government said the number of Americans who owe taxes was expected to be larger this tax season, and the IRS went as far as to waive underpayment penalties for some tax payers.

Democratic lawmakers opposed to the 2017 tax overhaul have seized on the lower figures to criticize the Trump administration's tax policies.

"Let's call the President's tax cut what it is: a middle-class tax hike to line the pockets of already wealthy corporations and the 1%," Democratic Sen. Kamala Harris, D-Calif., said in a Feb. 11 tweet.

But government officials say it's too early to declare the IRS data bad news for Americans hoping for a sizable refund this tax season.

The Treasury Department called news reports on fewer tax filings and lower refunds "misleading," saying in a Feb. 11 tweet that "refunds are consistent with 2017 levels and down slightly from 2018 based on a small initial sample from only a few days of data."

And a department spokesperson told The Hill the IRS processed fewer refunds claiming certain tax credits – like the earned income tax credit and the refundable child tax credit – during the time period covered by the 2019 data.

"As a result, comparing weekly data is misleading and confusing," a department spokesperson said, adding that Americans could also still be paying less tax even if refunds appear smaller.