Average 2026 US Tax Refunds up 10%, but 1 in 5 Filers Miss This Tax Credit Worth Thousands of Dollars

US Internal Revenue Service data shows that the average tax refund size in 2026 has increased by 10.2% so far this filing season compared with the same period in 2025. The average tax refund as of 20th February was $3,804 for individual filers, higher than $3,453 a year earlier.

Furthermore, the total refund amount rose 6.9% YoY to $109 billion. However, the total number of tax returns processed fell by 2.4%. The marked rise in tax refunds could be attributed to US President Donald Trump's big beautiful bill, which the White House said in late January could boost average tax refunds by $1,000 or more.

However, a recent Oxford Economics report predicted that tax refunds could jump by a whopping 20% this year as more benefits flow to middle- and upper-income US households due to 2025 tax cuts.

Average Refunds Typically Rise by Late February

According to the law, the IRS cannot disburse refunds claiming the earned income tax credit (EITC) or the refundable part of the child tax credit, known as the additional child tax credit, until 15th February. It means that the agency's first two filing-season statistics, based on data through 6th Feb. and 13th Feb., respectively, did not include millions of refunds with EITC credits.

'As we head into late February, the average refund size pops — it gets larger,' said Andrew Lautz, director at the Bipartisan Policy Centre. Experts believe that between 13th Feb. and 20th Feb., the average tax refund size increased to $3,804 from $2,476.

Most Don't Claim Thousands of Dollars Under EITC

For 2025 tax returns, the maximum EITC is $8,046 for tax filers with three or more qualifying children. Note that for 2024 tax returns, the average EITC payment was $2,916.

The EITC adjusts annually based on the IRS' inflation updates, but changes weren't made under Trump's big beautiful bill. Meanwhile, the additional child tax credit, worth up to $1,700 for 2025, will continue to adjust for inflation. EITC for low- to moderate-income workers is a fully refundable credit, even when no taxes are owed.

Data shows that 23.5 million tax filers collected $68.5 billion in EITCs from 2024 returns, with the average credit of $2,916. However, the IRS said 1 in 5 eligible taxpayers don't claim this credit.

EITC eligibility can be complex and is based on multiple factors, such as earnings, tax filing status, and the number of qualifying children. 'As a result, millions of eligible taxpayers fail to claim the EITC, while other taxpayers claim amounts for which they are not eligible,' noted national taxpayer advocate Erin Collins.

For 2025, the adjusted gross income limits for married couples filing jointly ranged from $26,214 for those without children to $68,675 for those with three or more children. Single filers without children can make up to $19,104, while the same filers could earn up to $61,555 with three or more qualifying children.

However, Trump has proposed expanding the child tax credit. While details remainm Trump has expressed interest in 'a significant expansion of the child tax credit,' with JD Vance suggesting an increase to $5,000 per child. Research shows that the child tax credit improves various health outcomes for both children and their caregivers.