US Tax Refund Tracker 2026

• We estimate nearly $335 billion in refunds will be distributed through June, up more than 11% from a year ago driven by retroactive changes to withholdings, new deductions and expanded tax credits. 
• With more cash landing in March, it’s an important boost for retail spending at time when rising gas prices and slowing job gains have consumers on edge.
• While average refunds are up, the number of returns processed is not. We attribute the rise in the amount refunded to lower personal tax liabilities, and the static number of returns to a labor market that in 2025 was defined by its low-hire, low-fire dynamic.
• We find that the pace and timing of refunds continue to reflect changes in the tax law, which have shifted a significant proportion of refunds from February into March. 

Refunds in 2026 are off to a strong start. In our tracking, we estimate that $190.8 billion has been refunded from January 26th through March 20th, up 11.6% from the amount disbursed in the first 40 days of 2025, and just a hair below the pace seen in 2021. Factoring in the start date and current pace, we estimate that nearly $335 billion will be disbursed in the first two quarters of this year, up 11.2% from 2025, and eclipsing 2022’s recent high.

Given the fast start and larger-than-average refund, we estimate that March 2026 will see $98.5 billion in refunds, about $16.8 billion more than in 2025. The strong rhythm of tax refunds also suggests that the IRS is managing a solid pace of review and should alleviate some of the concerns that layoffs are affecting the processing of returns.

While average refunds are up, the number of returns processed is not. We attribute the rise in the amount refunded to lower personal tax liabilities and the static number of returns to a labor market that in 2025 was defined by its low-hire, low-fire dynamic. The result was sustained wage growth, but little change in the number employed.

Before the pandemic, the bulk of tax refunds had been distributed in February, about 40.7% of the total disbursed between January and June, followed by March and April. In recent years, however, antifraud regulations have pushed refunds from late February into early March, shifting consumer spending patterns. 

This year, delays have been introduced by a push to accelerate the shift to direct deposit. In keeping with the executive order signed in March 2025, most federal payments are to be issued electronically, and the IRS has stated it will offer only “limited exceptions” for paper checks. While this change affects a minority of filers, less than 10%, some 9.5 million people received refunds by mail in 2025.

The IRS began sending notices to those who do not include direct-deposit information on their returns, noting that paper refunds could be delayed six weeks or more. Our tracking confirms a sharp drop in the amount of refunds issued by check in 2026. 

The concentration of monies flowing to consumers in late February and early March, including $84.2 billion in a single week, is likely to provide a boost to spending in March, which previously would have been spread out over the two months. Given the nature of affected refunds, which are predominantly concentrated among lower-income consumers, owing to the tax credits involved, means that the individuals receiving these funds are more likely to spend them.

The timing of refunds then matters to retailers, particularly in the "big" month of issuance. Historically, we find a 10% increase in refunds, year-over-year (y/y), to be associated with a roughly 2% rise in retail spending at general merchandise, apparel, furniture, and other merchandise (GAFO) stores. That’s good news for retailers looking for reasons to be optimistic, even as slowing job gains and stubborn inflation weigh on consumer sentiment. 

The war with Iran began on February 28th, and while rising gas prices are uncomfortable for consumers, their impact is more likely to show up in measures of consumer wellbeing than aggregate demand, at least for now. Here data show a consumer largely treading water, with spending tracking income growth. Excluding motor vehicle dealers and gasoline stations, sales rose 0.3% in January and were up 4.7% from a year ago.

February’s lackluster job numbers won’t help consumers’ angst, but they are still spending enough to keep growth positive in the near-term. In our forecast, growth of spending is driven by steady demand against firming prices, with larger tax refunds expected to help support sales through the second quarter.

That said, our March baseline assumes a mild and relatively short-lived economic shock stemming from the onset of the war. As the conflict drags on, the risk of a prolonged war with more severe economic consequences rises. Higher gas prices mean consumer sentiment and confidence can be expected to remain near historic lows, but spending in our current view is driven less by worry and more by fundamentals.

Job gains have slowed, but unemployment remains low and unless layoffs pick up, a tight labor market suggests wages will continue to rise. For retail, this suggests consumers are less likely to throw in the towel, as they are to wait and see what comes to pass. 

This article was published by S&P Global Market Intelligence and not by S&P Global Ratings, which is a separately managed division of S&P Global.