States With the Highest and Lowest Tax Refunds: Is Yours on the List?

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According to MoneyBot5000.com, based on IRS reports, tax refunds in 2025 were roughly 13% higher than last year, with the average refund amount at $2,900.

It also broke down tax refund details to discover the 10 states where residents are receiving the highest average tax refund, as well as those with the lowest tax refunds.

Also see six ways to use your tax refund to make money.

Highest Tax Refunds

When it comes to the highest tax refunds, Wyoming topped the list with an average refund of nearly $10,000 per filed tax return.

Lowest Tax Refunds

And with the lowest average tax refund is Alabama. Here are the other states that made the list.

A Larger Refund Isn’t Always Best, According to Experts

You might look at this list and feel a little envious of those in Wyoming and Mississippi with their $8,000-plus tax refunds. But a large tax refund isn’t always a sign of good financial management.

“I see so many clients who receive large refunds who mention their struggles in paying bills,” said Christopher Jervis, an Atlanta-based IRS enrolled agent and president of Lone Wolf Financial Services. “Having that extra $200 or $300 per month would certainly help.”

Rather than loaning the government the money, interest-free, for nine months to a year, consider reviewing your withholding taxes on your W-4 form to take out just enough to cover your tax bill. “Given the current situation at the IRS involving funding and personnel cuts, I would advise taxpayers to get as small a refund as possible,” he said.

He recommended workers review their W-4 at least annually and, ideally, every six months. “Make sure you aren’t over-withholding or under-withholding,” he said. “The goal is to hold out enough to cover the tax bill. Anything extra is a refund, but it’s also not available on payday to pay bills. Most people have bills due each month, not next February when the refund is sent.”

Do This If You Want Money Back

On the other side of the coin from taxpayers who received a large refund are those who had to pay unexpectedly. “So many people who received surprise tax bills did so because they were not updating their W-4 withholding each year,” Jervis said.

It’s also smart to review your tax return, perhaps with the help of an IRS enrolled agent, CPA or another reputable, credentialed tax preparer, to make sure you claimed every tax credit and deduction you qualified for.

Adam Hamilton, co-founder of REI Hub, said that taxpayers who own homes could unlock a smaller bill or larger refund by understanding the deductions available.

“They should know exactly what they can deduct as far as property taxes, mortgage interest, [and] home renovations. The more that they get out of home-related deductions, the better their tax refund can be,” Hamilton said.

Sources

• MoneyBot5000.com, “MoneyBot5000 Finds More Tax Refunds in 2025–And They’re Bigger Than Before.”
• Christopher Jervis, Lone Wolf Financial Services
• Adam Hamilton, REI Hub

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