Overview of Tax Refunds

According to IRS statistics reported by Bankrate, approximately 64% of American taxpayers received a tax refund in 2024. The average refund amount can vary widely depending on geographic location.

State-wise Average Refunds

For the tax year 2022, the latest full-year statistics revealed an average refund of $4,381, as per a report from LendingTree. Notably, residents of Wyoming topped the charts with the largest average refund, receiving $6,367.

Following Wyoming, taxpayers in Florida and the District of Columbia saw impressive refunds of $5,934 and $5,848, respectively. Florida also recorded the highest year-over-year growth in refund amounts, increasing by 18.6%.

Conversely, West Virginia reported the lowest average refund at $3,183. Maine and New Mexico were not far behind, with average refunds of $3,199 and $3,394, respectively.

Planned Uses for Tax Refunds

A significant portion of taxpayers—66%—plan to utilize their refunds in practical ways. Specifically:

• 34% intend to pay off existing debt.
• 32% plan to deposit the funds in a savings account.
• 14% are considering using their refunds for vacations.
• 14% aim to save for larger purchases, such as homes or cars.
• 11% intend to assist family members financially.
• 10% of recipients plan to invest their refunds in retirement accounts.
• 9% have plans to invest in the stock market.
• 16% remain undecided about how to spend their refunds.

Expert Opinions on Spending Refunds

LendingTree’s Chief Consumer Finance Analyst, Matt Schulz, shared insights on refund spending. “There’s nothing wrong with taking a piece of the return and having some fun with it,” he noted. However, he emphasized that for individuals managing high-interest debt and pursuing significant financial goals, the majority of the refund should ideally go towards those priorities.