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Average Tax Refund Rises 3% to $3,745, Led (Again) by Wyoming

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Most Americans’ taxes are due on April 18. As consumers prepare for Uncle Sam’s annual visit, we looked at where taxpayers got the biggest average refunds in tax year 2020 (the latest available full-year data) — and where they got the least.

Regardless of state rankings, there was good news for consumers: The average refund was $3,745 in tax year 2020 — about 3% higher than the $3,651 average refund in tax year 2019. (That’s particularly good news for the 36% of Americans relying on their tax refund this year, according to a separate LendingTree survey.)

After reviewing how much consumers received in tax refunds, stick around for tips on maximizing your tax returns.

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Key findings

  • The average refund in tax year 2020 — the latest available full-year data — was $3,745, up 3% from $3,651 in tax year 2019 and 2% from $3,660 in tax year 2018. 76% of taxpayers received a refund in tax year 2020, up from 75% in tax year 2019 but the same as in tax year 2018.
  • Among those receiving refunds, Wyoming taxpayers saw the biggest average for the third year in a row. Wyoming taxpayers with refunds received an average of $4,877 in tax year 2020, down 3% from $5,027 in tax year 2019 and up 6% from $4,602 in tax year 2018. In tax year 2020, Wyoming taxpayers who owed money saw the second-largest average bill — $8,549 — behind South Dakota at $8,724.
  • Maine taxpayers saw the smallest average tax return — also for the third year in a row. Among those receiving refunds, Maine taxpayers received an average of $2,920 in tax year 2020 — up 6% from $2,752 in tax year 2019 and 6% from $2,743 in tax year 2018. Maine taxpayers who owed money in tax year 2020 saw an average bill of $5,952.
  • Taxpayers who make $10,000 to $24,999 a year get 11.2% to 28.0% of their income back, on average, as a tax refund — the highest among the income brackets. While this percentage generally shrinks the more you make, this pattern doesn’t continue through the highest brackets.

Average refund in tax year 2020 was up 3% from 2019

Taxpayers received a break in tax year 2020, which saw its filing deadline extended to May 17, 2021, because of the pandemic. For the 76% of taxpayers who received a refund, the average refund amount was $3,745. That’s up 3% from $3,651 in tax year 2019 and 2% from $3,660 in tax year 2018.

A slightly higher percentage of taxpayers received a refund in tax year 2020, versus 75% in tax year 2019. But it was a return to the same percentage as tax year 2018.

Average refund by year

Tax year% of taxpayers receiving a refundAverage refund
201876%$3,660
201975%$3,651
202076%$3,745

Source: LendingTree analysis of IRS tax year 2018, 2019 and 2020 data.

What’s different? The pandemic-related economic impact payments that started in 2020 may have contributed to larger refunds for those who didn’t receive theirs and sought a recovery rebate credit. Those who didn’t receive the two economic impact payments during tax year 2020 — which provided up to $1,200 per eligible adult and up to $500 per eligible child in April 2020, then up to $600 per eligible adult and child in December 2020 — could claim a credit at tax time.

Wyoming taxpayers saw biggest average refund

In which state did taxpayers receive the biggest refunds? For the third year in a row, it was Wyoming. In tax year 2020, Wyoming taxpayers with refunds received an average of $4,877 — that’s down 3% from $5,027 in tax year 2019 but up 6% from $4,602 in tax year 2018.

Meanwhile, residents in the District of Columbia saw the second-highest amount, where taxpayers with refunds received an average of $4,462. That’s a 2% bump from the average refund of $4,356 in tax year 2019, though it’s similar to the $4,403 taxpayers received in tax year 2018. Coming in third was Florida, where taxpayers received an average of $4,337 in refunds — in line with the $4,301 average refund in tax year 2019 in the state and the $4,285 in tax year 2018.

West Virginia residents were the most likely to receive a refund at 83%. However, among the five states with the biggest average refunds, Texas residents had the highest percentage of residents receiving refunds (79%). That compares with:

  • 78% of residents in Wyoming
  • 77% of residents in Florida
  • 76% of residents in Connecticut
  • 74% of residents in the District of Columbia

5 states with the biggest average refunds

RankState% of taxpayers receiving a refundAverage refund
1Wyoming78%$4,877
2District of Columbia74%$4,462
3Florida77%$4,337
4Texas79%$4,317
5Connecticut76%$4,280

Source: LendingTree analysis of IRS tax year 2020 data.

In tax year 2020, Wyoming taxpayers who owed money also saw the second-largest average bill — $8,549. Just ahead of them was South Dakota at $8,724. Notably, four of the five states with the biggest average refunds — Wyoming, the District of Columbia, Florida and Connecicut — fall in the top 10 list of the states with the largest average amounts owed.

10 states with the highest average amount owed

RankStateAverage amount owed
1South Dakota$8,724
2Wyoming$8,549
3Washington$8,452
4Florida$8,331
5Massachusetts$8,286
6North Dakota$8,013
7District of Columbia$7,914
8Connecticut$7,874
9Nevada$7,858
10New Hampshire$7,834

Source: LendingTree analysis of IRS tax year 2020 data.

Given these hefty bills, paying what you owe can be difficult. Fortunately, consumers struggling to pay the IRS have several tax debt relief options worth exploring.

Maine taxpayers saw smallest average refund

Similar to the state with the largest average refund, the state with the smallest — Maine — secured its position for the third year in a row. Maine taxpayers received an average of $2,920 in tax year 2020 — a 6% increase from $2,752 in tax year 2019 in the state and a 6% jump from $2,743 in tax year 2018.

Meanwhile, taxpayers in Wisconsin — the state with the second-smallest average refund — saw bigger refunds than in tax year 2019. While taxpayers here received an average refund of $2,976 in tax year 2019, they received $3,072, on average, in tax year 2020 — an increase of 3%. It’s also about 3% more than in 2018, when the state’s average tax return was $2,997.

Following that, Oregon took third. Taxpayers in tax year 2020 received an average refund of $3,095. That’s a 7% increase from $2,896 in 2019 in the state and a 4% increase from $2,970 in tax year 2018.

In Maine and Wisconsin, 77% of residents received refunds. Meanwhile, just 73% of residents in Oregon received refunds in 2020.

5 states with the smallest average refunds

RankState% of taxpayers receiving a refundAverage refund
1Maine77%$2,920
2Wisconsin77%$3,072
3Oregon73%$3,095
4West Virginia83%$3,102
5Iowa78%$3,132

Source: LendingTree analysis of IRS tax year 2020 data.

How does that stack up against the average bills in these states? Taxpayers in West Virginia owed the least of any state, with an average bill of $4,215. Meanwhile, Iowa ($5,029) and Wisconsin ($5,251) were also among the 10 states with the smallest bills.

10 states with the lowest average amount owed

RankStateAverage amount owed
1West Virginia$4,215
2Mississippi$4,714
3Hawaii$4,929
4New Mexico$4,946
5Kentucky$4,987
6Iowa$5,029
7Ohio$5,051
8Wisconsin$5,251
9Maryland$5,260
10Arkansas$5,312

Source: LendingTree analysis of IRS tax year 2020 data.

Full rankings

States with the highest average refunds

RankState% of taxpayers receiving a refundAverage refund in tax year 2020Average refund in tax year 2019
1Wyoming78%$4,877$5,027
2District of Columbia74%$4,462$4,356
3Florida77%$4,337$4,301
4Texas79%$4,317$4,123
5Connecticut76%$4,280$4,461
6New York76%$4,189$4,444
7Massachusetts75%$4,119$4,175
8Nevada77%$4,099$3,874
9Washington75%$4,049$3,692
10California70%$4,030$4,010
11Illinois78%$3,946$3,708
12New Jersey74%$3,858$3,986
13Louisiana81%$3,792$3,660
14Utah76%$3,713$3,413
15Maryland74%$3,703$3,583
16Colorado74%$3,701$3,537
17North Dakota77%$3,682$3,564
18Oklahoma79%$3,675$3,503
19Alaska76%$3,664$3,485
20Hawaii72%$3,556$3,271
21Georgia76%$3,552$3,461
22Virginia75%$3,539$3,424
23South Dakota77%$3,498$3,383
24Tennessee79%$3,472$3,361
25Arizona74%$3,466$3,352
26Pennsylvania80%$3,456$3,232
27New Hampshire77%$3,453$3,240
28Michigan78%$3,433$3,229
29Kansas76%$3,423$3,292
30Mississippi81%$3,422$3,322
30Alabama78%$3,422$3,298
32Arkansas79%$3,367$3,291
33Rhode Island78%$3,354$3,172
34Idaho74%$3,345$3,046
35Missouri78%$3,321$3,187
36New Mexico78%$3,284$3,159
37Delaware77%$3,279$3,132
38Indiana81%$3,244$3,100
39North Carolina77%$3,241$3,130
40South Carolina76%$3,239$3,147
41Nebraska77%$3,234$3,092
42Kentucky81%$3,230$3,085
43Minnesota74%$3,197$3,045
44Montana73%$3,182$3,058
45Ohio79%$3,176$3,023
46Vermont78%$3,143$2,924
47Iowa78%$3,132$2,952
48West Virginia83%$3,102$2,963
49Oregon73%$3,095$2,896
50Wisconsin77%$3,072$2,976
51Maine77%$2,920$2,752

Source: LendingTree analysis of IRS tax year 2020 data.

What percentage of income did taxpayers get back on average?

Which consumers get the highest percentage of their income back, on average, through tax refunds? That would be the lowest-earning consumers. Taxpayers who make $10,000 to $24,999 a year get an average of 11.2% to 28.0% of their income back as a tax refund.

While high-income taxpayers generally get back less than low-income taxpayers, that pattern doesn’t hold up for all high-earners. In fact, the highest income group gets a slightly higher percentage of their income back on average than the income group below. Take a look at the breakdown below:

Average % of income received in tax refunds by income level

Income levelAverage refund% of income
$10,000 to $24,999$2,799.7411.2% to 28.0%
$25,000 to $49,999$2,845.815.7% to 11.4%
$50,000 to $74,999$2,830.103.8% to 5.7%
$75,000 to $99,999$3,347.693.3% to 4.5%
$100,000 to $199,999$4,436.362.2% to 4.4%
$200,000 to $499,999$10,316.372.1% to 5.2%
$500,000 to $999,999$35,128.023.5% to 7.0%

Source: LendingTree analysis of IRS tax year 2020 data.

Generally, though, there could be a few reasons why low earners receive a higher percentage of their income back in tax refunds.

“Low earners may have less interest and dividend income from savings outside of retirement accounts,” LendingTree senior industry analyst Ken Tumin says. “That can result in larger tax refunds compared to higher earners who may have more interest and dividend income.”

Making the most of your taxes: Expert tips

While tax refunds were slightly higher in tax year 2020 than tax year 2019, the IRS warns that tax year 2022 tax refunds will likely be smaller — meaning consumers should do what they can to maximize their refunds. Specifically, Tumin recommends the following:

  • Review and adjust your tax withholdings for the next tax year. “With higher savings account rates this year, you don’t want to overpay withholdings,” he says. “You want that money-earning interest for yourself. On the other hand, you also don’t want to withhold too little. That can result in tax penalties. The IRS withholding estimator tool is a useful resource.”
  • Consider contributing the maximum allowable amount to an individual retirement account (IRA) by Tax Day — which falls on April 18 this year — for tax year 2022. This may lower your taxable income for 2022 and increase your retirement savings.
  • If you have a sizable withholding for this year, consider using part or all of the refund to purchase Series I savings bonds (I bonds). “By using IRS Form 8888 when filing your taxes, you can use all or part of your tax refund to purchase up to $5,000 in paper Series I savings bonds,” Tumin says. “I bonds are a great way to build up savings with returns that keep up with inflation without risk of loss. With high inflation in the last year, I bonds have become especially attractive.”

It’s important to note that Tax Day falls a little later this time. While most consumers should expect to file their taxes by April 18, some consumers in California may have more time. According to the IRS, some Californians have until May 15 to file their taxes due to flooding across the region.

Methodology

LendingTree researchers analyzed federal individual income tax returns (Form 1040s) filed from Jan. 1 to Dec. 31, 2021, for tax year 2020 — the latest available — from the IRS’ Statistics of Income program.

Due to processing delays from the COVID-19 pandemic, this data includes paper returns filed through early June 2022 for tax year 2020. The IRS also notes that a limited number of returns are included for tax years before 2020. The IRS defines this as a “proxy for returns that are typically filed beyond the 12-month period.”

To estimate the average refund in the U.S. and each state, researchers divided the total amount refunded by the number of people who received refunds. To determine who owed money, researchers divided the total amount owed by the number of people who owed taxes.

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