As the 2025 tax season progresses, many Americans are experiencing delays in receiving their IRS tax refunds. Several factors contribute to these setbacks, including significant staffing cuts, policy changes, and increased scrutiny of certain tax credits.
Average Refunds Decrease
Early data indicates that the average tax refund in 2025 is approximately 2,169, a 32 decrease from the previous years average of 3,207. This reduction is partly due to the IRS processing simpler returns earlier in the season, with more complex filings expected closer to the April 15 deadline. citeturn0search0
Staffing Cuts Impact Processing Times
The IRS is undergoing significant staffing reductions, with plans to lay off over 6,000 employees. These cuts are expected to slow down the processing of tax returns, leading to longer wait times for refunds. Tax experts advise filing electronically and early to mitigate potential delays. citeturn0search4
Delays for Specific Tax Credits
Taxpayers claiming the Earned Income Tax Credit EITC or Additional Child Tax Credit ACTC may experience additional delays. The IRS is required by law to hold these refunds until midFebruary to prevent fraud, and processing times can extend further due to verification procedures. citeturn0search2
Student Loan Defaults Affect Refunds
Starting May 5, 2025, the Department of Education will resume collections on defaulted federal student loans. Borrowers in default risk having their tax refunds garnished through the Treasury Offset Program. Over 5 million borrowers are currently in default, emphasizing the importance of addressing loan repayments promptly. citeturn0news14
Tips to Expedite Your Refund
To minimize delays, taxpayers should:
File Electronically: Efiling is faster and more secure than paper filing.
Opt for Direct Deposit: Choosing direct deposit can expedite the receipt of refunds.
DoubleCheck Information: Ensure all personal and financial information is accurate to avoid processing errors.
Monitor Refund Status: Use the IRS Wheres My Refund? tool or the IRS2Go mobile app for updates. citeturn0search2
Conclusion
The 2025 tax season presents several challenges for taxpayers awaiting refunds. By understanding the factors contributing to delays and taking proactive steps, individuals can better navigate the refund process and reduce waiting times.