Tax refunds are payments that the Internal Revenue Service (IRS) returns to taxpayers who paid more taxes than they owed during the fiscal year. This occurs due to excessive payroll withholdings, high estimated payments, or refundable credits such as the Earned Income Tax Credit (EITC) or the Child Tax Credit (CTC).
In 2025, the projected average tax refund is approximately $3,116, up 3.5% from $3,011 in 2024. This increase is attributed to inflation adjustments and increased use of tax credits. Amounts vary based on each taxpayer’s income, deductions, and specific obligations.
Who will receive tax refunds before the end of May?
The process depends on the type of return you file: electronic or paper. Those who choose e-file with direct deposit expedite the process, while physical returns take up to six months. Credits like the EITC, subject to the PATH Act, delay payments until February or March of the next year.
According to IRS projections, refunds between May 28 and 31, 2025, will fall into three groups. The first includes electronic filers who filed Form 1040 between April 5 and 10, without claiming withheld credits such as the EITC or ACTC.
The second group are taxpayers with simple returns (W-2 income and standard deductions) filed near the April 15 deadline. The IRS processes these cases within 21 business days, allowing for deposits by the end of May if there are no errors.
The third group consists of cases with minor adjustments, such as Social Security number corrections, resolved quickly by the taxpayer. These refunds arrive on time if the discrepancies don’t require manual review. Paper returns or those with withheld credits are excluded from this window.
Tax refunds increased in 2025: 3.5% more than the previous year
In 2025, total direct deposit refunds will reach 64.7 million, a 2% increase from 2024 (63.4 million). The total amount refunded will reach $206.255 billion, compared to $195.901 billion the previous year.
The IRS maintains a 90% efficiency rate for simple electronic returns, processed in less than 21 days. Complex cases, such as audits or additional credits, may extend into June or July.
Refunds may be delayed for these reasons
Those claiming the EITC or ACTC won’t receive their refunds in May. The PATH Act requires the IRS to hold these payments until February or March to check for fraud. Paper returns, even without errors, take six months or more to process.
Taxpayers with prior tax debts or offsets also experience delays. The IRS prioritizes payment of outstanding obligations before issuing refunds. These cases require individual follow-up through the Where’s My Refund? portal or by phone.
The IRS projects a 2% increase in direct deposits by 2025, reaching 64.7 million. This growth reflects the migration of taxpayers to digital methods, which avoid delays associated with physical returns.
The increase in the average amount to $3,116 is linked to inflation adjustments in tax brackets and credits. The Child Tax Credit, for example, could increase in value in 2025, impacting refunds for eligible families.
