Tax Refunds Dropped by 3.3 Percent in 2024

By Alex Tanzi.
Bloomberg News (via TNS)

Fewer U.S. taxpayers have received a refund this year in the run-up to tax day compared to 2023, signaling some consumer spending may be disrupted.

Data from the Internal Revenue Service showed that 66.8 million taxpayers were reimbursed through April 5 compared to 69.1 million through April 7 last year. That means that 3.3%, or roughly 2.3 million, fewer Americans obtained the boost to their finances that they got in 2023.

Still, while the number of refunds dropped, the average amount received ticked higher to just over $3,000 compared to almost $2,900 last year. Americans are increasingly reliant on these refunds, with many saying they’d use the extra cash to pay off debt, according to a survey conducted by LendingTree.

The IRS has received more than 100 million tax returns so far in 2024 and a massive surge is expected over the last week of tax season culminating with the April 15 deadline. But people that tend to file late typically don’t anticipate a refund.

Separately, a poll conducted by CivicScience found that more Americans say they owed money unexpectedly or owed more than thought this year compared to 2023, the latter being especially true for households earning $100,000 or more annually.

The survey results also suggested that tax refunds may be correlated with economic sentiment. Within the past 30 days, almost two thirds of those who owed more than anticipated were far more likely to report being “very” concerned about the current state of the U.S. economy and the labor market, compared to 45% who were billed or refunded as expected.

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