Here’s some good news. According to the most recent IRS data, the average tax payer will see a four percent increase in their refund versus the same time last year. This boost in 2024’s average refund size is due to the IRS’ adjustment of many tax provisions for inflation. The standard deduction and tax brackets were set seven percent higher for the current 2023 tax filing year. Because of that, workers whose pay didn’t keep up with last year’s high inflation are on track to get bigger tax refunds, with some lucky ones likely to receive up to 10 percent more in 2024.
And now the bad news. It might take longer to receive that tidy refund than in years past. While the IRS says it issues more than 90 percent of tax refunds within three weeks of receipt, the agency is quite a bit behind that pace in 2024. Several reasons factor into the delay. The agency had an additional week to process returns last year and the overall number of taxpayers filing on time is down. Changes to the tax code, increased safeguards against identity theft, as well as new “Where’s My Refund” tracking software have all impacted processing speed.
For retail automotive dealers and lenders who are counting on the April refund bump in car sales, it’s time to put another plan in place. According to a new study from Bankrate, half of all Americans scheduled to receive a refund are planning to use their checks to pay down debt or bolster savings versus a making a big purchase such as a vehicle. However, there are opportunities for credit unions to boost the odds of capturing those consumers who do decide to apply a tax refund towards a vehicle.