| | | OOPS! DROP In Average Tax Refunds Nearly Doubles Within Days; The average payout has now tumbled by more than 16 percent.
02/23/2019 07:51 am ET
By Amy Russo
huffpost.com
Average tax refunds for this season are continuing to nosedive, according to the latest set of Internal Revenue Service data released Friday.
The average refund has plummeted by 16.7 percent, compared to last year. That’s down from the 8.7 percent drop reported last week.
This week’s data juxtaposed refunds on Feb. 15, 2019, totaling an average of $2,640 with those from Feb. 16, 2018, having reached $3,619.
Critics blame reforms under President Donald Trump’s Tax Cuts and Jobs Act, which essentially overhauled the federal tax law. This is the first filing season since the legislation’s implementation during which its impact can be gauged.
According to Politico, the Trump administration has pinned the blame for the drop on misleading data.
A Treasury Department spokesperson told the outlet that contrary to this year, last year’s numbers included more payments to people claiming they qualified for the earned income tax credit.
Last week, the agency attempted to diminish the significance of the payouts last week despite the fact that many Americans rely on tax refunds to ease financial burdens.
“Most people are seeing the benefits of the tax cut in larger paychecks throughout the year, instead of tax refunds that are the result of people overpaying the government,” it said in a statement obtained by Fortune.
A key part of the issue comes down to withholding complications. Thanks to Trump’s tax code changes, worker paychecks showed an increase, but for many, that was a trade-off for a more substantial refund this season, leaving them owing more to the government.
Urban-Brookings Tax Policy Center senior fellow Howard Gleckman told the Los Angeles Times that reactions are understandably negative, noting that if taxpayers evaluate the new code using “the refund and not the total tax you pay — and the refund is lower than what you got last year — it stands to reason you’re going to be unhappy.” |
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