Average tax refunds vary between states for a few reasons
April 14, 2025
Key takeaways:
- Wyoming, Mississippiand Nevadahave the biggest average tax refunds.
- Fewer people are getting tax refunds in 2025 so far, but the refunds are bigger.
- The IRS has said there is more than a billion dollars in unclaimed tax refunds from 2021 alone.
Tax refunds are a lot bigger in some states.
States mostly in the Westand South ranked among the top 10 for the states with the biggest average tax refunds per person, according to an analysis by personal-finance website MoneyBot5000, which reviewed the latest comprehensive 2022 Internal Revenue Service (IRS) tax data.
The five states with the biggest tax refunds were Wyoming, with $9,957, followed by Mississippi ($8,006), Nevada ($7,829, Florida ($6,754)and Utah ($6,638).
On the other hand, the five states with the smallest tax refunds were Alabama, with $2,821, and Hawaii ($3,871), Delaware ($3,884), California ($3,898) and New Mexico ($3,907).
Average tax refunds vary between states because of family size, living arrangements, state-specific tax rulesandincome, but residents of states with lower costs of living, such as Wyoming,Mississippi and Nevada, also oftengetbigger tax refunds.
In 2025 so far, tax refundshave dropped by nearly 5% on average, but the average refunded amount has grown by around2% to more than $2,600, MoneyBot5000 said.
“This can be caused by several factors, like changes in tax withholding, moving to a higher income bracket, and new tax credits and deduction policies,” MoneyBot5000 said.”For example, during the COVID-19 pandemic, the US government issued stimulus payments that could be claimed through Recovery Rebate Credit when people filed their tax return.”
More than a billion in unclaimed tax refunds
There’s more than 1 billion in tax refunds from 2021 that isunclaimed, the IRSsaidFriday.
The IRS said there is no penalty for people who didn’t file if they are due a tax return, but they need to file to claim the refund within three years.
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