Americans are poised to receive bigger refunds when they file their taxes this year than they did in 2025, due to changes in the tax code.
Already, U.S. households have received an average federal tax refund of $3,742, according to IRS data as of Feb. 27. That’s about 10.6% higher than the average refund was a year ago.
This is a big deal: For tens of millions of Americans, the day their tax refund arrives is the biggest single-day cash flow they see all year.
This influx of cash on a mass scale has ripple effects across the whole economy, as Americans use the money for things like paying down debt, buying big-ticket items and topping up savings accounts.
But this year, experts say the economic impact of the U.S.-Israeli war in Iran could derail any potential boost to the economy that would typically come from consumers spending their tax refunds.
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