In a recent study, tax refunds have shown a consistent rise each year, yet half of the recipients find themselves using the entire amount to cover essential living costs.
Surveying 2,000 U.S. taxpayers who received refunds this year, the study revealed an average refund of $2,825, up from last year’s $2,300. This trend of increasing refunds was confirmed by nearly 39% of participants, who noted a higher refund amount for 2025 compared to the previous year. Similarly, 32% reported receiving more on their 2024 refund than in 2023.
The research, commissioned by TaxSlayer and carried out by Talker Research, highlighted that 71% of taxpayers have already either spent their refund or have plans for it, marking an increase from the 64% who did so last year.
Mirroring last year’s pattern, a staggering 98% of those who have spent their refunds allocated them to necessities. Specifically, 49% of respondents used their refunds solely on essential expenses such as monthly bills (59%), groceries and other basic goods (54%), and credit card debt (26%).
And like last year, nearly all who have already spent their refunds (98%) have done so on necessities. In fact, 49% have exclusively spent their refund money on necessities. Those include paying monthly bills (59%), groceries and essential goods (54%), and credit card debt (26%).
Only 18% have spent their refunds on luxuries, such as new clothes (43%), entertainment (28%), and fine dining (25%).
Satisfaction in refunds has also seen a rise: 63% said they were happily surprised with their tax refund this year, up from 62% last year and 40% in 2024.
Those who received more this year than last credited their big return to working more (35%), adjustments to their deductions and withholdings (32%), and pay raises (20%).
Meanwhile, 23% said they ended up earning less on their refund than last year, due to losing work (36%), moving to a higher tax bracket (14%), or dependents aging out of eligibility (13%).
“Refunds may be growing, but what stands out is how thoughtfully people are putting that money to work,” said Seth Babb, Head of Consumer Product at TaxSlayer. “For many households, refunds help cover essentials, which is why we focus on helping taxpayers maximize every dollar and make an impact that lasts beyond tax season.”
The study also revealed how recent tax law changes are having big impacts on taxpayers. Two-thirds (65%) of Americans said they were aware of tax law changes being applied this year.
And 83% have been impacted to some degree, with 29% facing “major or significant” impacts after filing their taxes for this year.
More than half (58%) believe at least one component of the One Big Beautiful Bill Act (OBBB) impacted their refund amount, from overtime income deduction (16%) to senior deduction (14%), increased child tax credit (12%), and tip income deduction (7%).
Forty-three percent believe the OBBB increased their tax refund amount, and 34% believe it has also increased how much they pay in taxes. Others believe it has decreased the amount they received (17%) and the amount they pay (14%).
Two in five taxpayers (42%) said they weren’t sure how long their taxes would continue to be affected by the OBBB, but those who had an idea estimated it would last four years.
“Staying informed about tax law changes can make a real difference at filing time. Even small adjustments to credits, deductions, or income can add up,” continued Babb. “Our goal is to help customers understand those changes so they can make informed decisions and file with confidence, knowing they’ve done it right.”
Research methodology:
Talker Research surveyed 2,000 Americans who have received any kind of tax refund this year who have access to the internet; the survey was commissioned by TaxSlayer and administered and conducted online by Talker Research between Apr. 15 and Apr. 20, 2026. A link to the questionnaire can be found here.