Retroactive Tax Cuts Raise Average Refund to $3,521

The average tax refund reached $3,521 as of the week ending March 27, an 11.1% increase over the same period last year. The IRS issued more than 62 million refunds totaling approximately $222 billion through late March. This increase follows retroactive tax cuts under the One Big Beautiful Bill Act, signed by President Donald Trump on July 4, 2025. The law expanded standard deductions and increased the Child Tax Credit. It also created new tax deductions for tipped income through 2028, overtime pay under the Fair Labor Standards Act, and adults aged 65 and older. Seniors receive an additional $6,000 deduction through 2028, which provides annual savings of roughly $1,100 for those earning between $80,000 and $130,000. Families with homeschooling children can now spend $10,000 per year per child tax-free from 529 education savings accounts. The act establishes a $1,000 Treasury deposit for babies born between Jan. 1, 2025, and Dec. 31, 2028. The IRS issued $222 billion in refunds.