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By Suzanne Blake
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April 15 marks Tax Day, but many Americans have already received their refunds.
The Internal Revenue Service sends out millions of dollars in tax refunds each year for overpaid taxes, but the amount can vary based on several factors.
Tax returns are based on a person's situation, and the amount of money a person receives, if they receive a refund, is dependent on income, deductions and the amount of taxes paid the previous year.
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Why It Matters
Americans qualify for tax refunds if they overpaid taxes during the fiscal year. Those eligible for refundable tax credits like the Earned Income Tax Credit or Child Tax credit could also have lower taxes and see a refund if they overpaid.
What To Know
The tax refund varies based on several factors, particularly your income and assets.
Wyoming, Florida, Washington, D.C., Connecticut, New York and Massachusetts had the highest average tax refunds in 2022, the last full data tax year, according to a new LendingTree report.
The analysis was based on federal income tax returns filed from January 1 through December 31, 2023, for tax year 2022 from the IRS Statistics of Income program.
Wyoming taxpayers received an average of $6,367, up 7.7 percent from $5,914 for tax year 2021.
Florida was next on the list, bringing taxpayers an average of $5,934 in their pockets, while Washington, D.C., was next at $5,848.
Florida saw an especially large jump in tax refund average, rising 18.6 percent from $5,005 in tax year 2021.
West Virginia taxpayers had the lowest average refunds, with an average of $3,183, down 2.1 percent from $3,251 for 2021. Maine taxpayers also experienced lower refunds, averaging $3,199.
The national average for 2022 was $4,381.
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What People Are Saying
Kevin Thompson, CEO of 9i Capital Group and host of the 9innings Podcast, told Newsweek: "The states with higher incomes and higher earners saw the biggest refunds which makes sense. As income goes up, withholdings usually go up too. So, it's a natural outcome: more money in, more money out."
Alex Beene, a financial literacy instructor for the University of Tennessee at Martin, told Newsweek: "It should surprise few states like New York, Connecticut and Massachusetts have some of the highest average tax refunds for residents, as these states have higher average incomes than most. However, seeing a state like Wyoming topping the list may not be what many Americans expect to see. While typically states with more high-income earners see major dollars refunded, some states that have smaller populations may still find a high amount of wealth concentrated there."
What Happens Next
Most tax refunds are issued within 21 days from when you file your taxes. According to the IRS, the average refund amount is $3,271.
The deadline to file taxes is April 15. After that, you'll accrue a 5 percent penalty for unpaid taxes for each month or part of a month that a tax return is late.
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