Which US states will have the biggest average tax refund in 2024?
The IRS has been sending out tax refunds for the last month with the average amount paid varying between different states.
The US tax system allows taxpayers to receive tax refunds if they have overpaid their taxes during the year. The size of the refund depends on various factors, including the amount of taxes paid, the amount of income earned, and the amount of deductions and credits claimed. Each state has different taxation laws, meaning the size of refunds will vary wildly. In December 2023, the IRS reported that $3,145 was the average refund size for all returns processed during the calendar year.
The data published by the IRS on 24 February comparing tax statistics from 2023 and 2024 reported a slight increase in the average size of taxpayer refunds. However, the two previous filing reports showed a decreased average return. Statistics released by the IRS on 24 February showed the average refund for people filing taxes this year was $3,272 if a filer provided direct deposit information and $3,213 for those who received a physical check. No data on how the refund size varies by state has been reported.
The US states with the largest tax refunds
To better understand which taxpayers receive the most significant refunds, we must consider the differences in tax law at the state level. Each state’s tax rates can affect taxes owed and refunds. States may offer tax credits and deductions that are not available at the federal level or are provided in addition to federal benefits. Various states offer their own Earned Income Tax Credits, which help boost refund amounts for certain income groups.
According to the financial outlet, the ascent, the ten states with the highest average tax refunds in 2023 were:
- South Carolina: $1,478.38
- Florida: $1,793.80
- District of Columbia: $1,757.25
- Louisiana: $1,723.80
- Wyoming: $1,719.75
- Texas: $1,714.15
- Illinois: $1,679.81
- Connecticut: $1,676.48
- Nevada: $1,663.16
- New York: $1,633.64
At the other end of the spectrum sat Idaho ($1,114.81), Oregon ($1,328.82), Montana ($1,370.75), Maine ($1,377.99), and Vermont ($1,387.85). This year, some states could move up on the list because of new credits and benefits offered to taxpayers. For instance, this year, some families in Minnesota will be able to claim the state’s Child Tax Credit, which is expected to alleviate child poverty and is the most generous benefit offered at the state level.