Average tax refunds are down 17 per cent so far in the first filing season under President Donald Trump’s tax overhaul, according to the IRS, prompting the Treasury Department to caution that the data contain aberrations and could be misleading.
Direct-deposit refunds dropped for the third week in a row this filing season to $2,703, from $3,256 a year earlier, for the seven days through Feb. 15, the IRS reported late Friday. The total number of refunds was down 26.5 per cent to 23.5 million, it said.
In a statement late Friday, the Treasury Department said that there was high public interest in taxpayer data from the current tax filing season and that while refunds are down, individual taxpayers’ overall liability has also fallen, bringing larger paychecks.
“The size of someone’s tax refund says nothing about whether their taxes have gone up or down,” the department said. “Data this early in the filing season has many aberrations and isn’t useful in drawing broad conclusions on refunds overall."
Taxpayers’ refunds in the first tax season since the overhaul was enacted are smaller than last year’s because the available deductions and credits, and revised withholding tables, changed. The IRS has waived some penalties for those who didn’t have enough withheld from their paychecks during the year.