Economy

This Is the State With the Largest Average Tax Refund

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The Internal Revenue Service collected more than $3.5 trillion in taxes in 2019. Not all of this money went to funding the government, however. Nearly half of all tax returns filed by individuals, corporations and estates received a refund.

Altogether, the IRS issued nearly 122 million refunds totaling $452.1 billion, at an average of $3,709 per refund. A number of variables affect the amount that is refunded, one of which is location. The average refund varies by state, from under $2,500 to more than $8,700.

To determine the average tax refund in every state, 24/7 Wall St. reviewed data on tax refunds from the IRS.

Though the average refund nationwide was just over $3,700 in 2019, only four states actually exceeded that amount. This is in large part because one state, Delaware, skewed the average, with an average refund of nearly $8,800. Many of these refunds were issued to some of the 1.5 million companies incorporated in the state. The state attracts many businesses because of its corporate-friendly tax laws, which include having no residency requirement and providing anonymity to corporate executives.

Federal taxes are, of course, far from the only taxation Americans face. They also have to pay state income taxes and other state and local taxes, including gasoline taxes, which range from 13 to 63 cents per gallon, depending on the state.

Delaware is the state with the highest average income tax refund, and the number is almost double the second state. Some details:

> Average federal tax refund: $8,766
> Median household income: $70,176 (16th highest)
> Federal tax collections per capita: $20,615 (the highest)
> Pct. filings receiving refunds: 45.6% (13th fewest)

Our methodology: To determine the average tax refund, states were ranked based on the average refund amount in the 2019 fiscal year, according to the IRS. The state average tax refund figure includes refunds for filings not just by individuals but all filing documents, including corporate taxes, estate taxes and more. Data on total collections and total number of tax returns filed also came from the IRS.

Supplemental data on median household income and population used to adjust total IRS collections to a per capita figure came from the U.S. Census Bureau’s 2019 American Community Survey.

Click here to read about the states with the highest average tax refunds.

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