Which State Gets the Biggest Tax Refund?

Which State Gets the Biggest Tax Refund?

This story is part of Taxes 2023, CNET’s coverage of the best tax software, tax tips and everything else you need to file your return and track your refund.

The IRS has already processed nearly 46 million federal income tax returns for tax year 2022 and issued more than $108.2 billion in refunds. 

As of Feb. 27, the average refund was $3,079, down a little more than 11% from this time last year, when the child tax credit and other tax breaks were expanded.

Of course, that’s just the national average. Online loan platform Lending Tree has ranked all 50 states and the District of Columbia by the largest average refund for tax year 2020, the last year for which full data is available.  

For more on taxes, find out about changes to the tax code this year and all the tax breaks homeowners can claim.

States with the biggest tax refund

More than three-quarters (76%) of Americans received a refund for tax year 2020, according to Lending Tree’s assessment of IRS data for returns filed from Jan. 1 to Dec. 31, 2021.

Nationwide, the average refund was $3,745. But taxpayers in Wyoming got back over $1,000 more than that from Uncle Sam, topping the rankings with an average refund of $4,877.

Wyoming is actually the least populous state in the US and one of nine that doesn’t collect income tax. 

Here’s the breakdown for the top 10. You can view the rankings for all 50 states and the District of Columbia on the Lending Tree website.

Top 10 Average Tax Refunds by Region

Rank State Average refund Percentage of taxpayers receiving a refund
1 Wyoming $4,877 78%
2 District of Columbia $4,462 74%
3 Florida $4,337 77%
4 Texas $4,317 79%
5 Connecticut $4,280 76%
6 New York $4,189 76%
7 Massachusetts $4,119 75%
8 Nevada $4,099 77%
9 Washington $4,049 75%
10 California $4,030 70%

Which state had the smallest average refund?

Maine was at the bottom of the list for refunds. Taxpayers in the Pine Tree State got back an average of $2,920, just 40% of what people in Wyoming did.

On the plus side, Maine’s figures represent a steady 6% increase from 2019 ($2,752) and 2018 ($2,743).

Once again, enhanced tax breaks for families were likely a factor: Maine has one of the smallest average household sizes in the US, 2.31 people

Bottom 10 Average Tax Refunds by Region

Rank State Average refund Percentage of taxpayers receiving a refund
42 Kentucky $3,230 81%
43 Minnesota $3,197 74%
44 Montana $3,182 73%
45 Ohio $3,176 79%
46 Vermont $3,143 78%
47 Iowa $3,132 78%
48 West Virginia $3,102 83%
49 Oregon $3,095 73%
50 Wisconsin $3,072 77%
51 Maine $2,920 77%

Which income bracket got the biggest refund?

In terms of straight dollar amount, the richest Americans got the biggest checks: Taxpayers who made between $500,000 and $999,999 in 2020 received an average refund of more than $35,000.

But when you look at who got the biggest percentage of their income back, on average, it was the lowest-earning Americans. Taxpayers who made between $10,000 and $24,999 received 11.2% to 28% of their income back as a refund.

Average Refund by Income

Income level Average refund Percent of income
$10,000 to $24,999 $2,799.74 11.2% to 28%
$25,000 to $49,999 $2,845.81 5.7% to 11.4%
$50,000 to $74,999 $2,830.10 3.8% to 5.7%
$75,000 to $99,999 $3,347.69 3.3% to 4.5%
$100,000 to $199,999 $4,436.36 2.2% to 4.4%
$200,000 to $499,999 $10,316.37 2.1% to 5.2%
$500,000 to $999,999 $35,128.02 3.5% to 7%

That could be in part due to federal tax credits available to poorer Americans. But, according to LendingTree senior industry analyst Ken Tumin, lower earners may also have less income from interest and dividends.

And while the percentage of annual income received as a tax refund generally dropped the more money you made, the highest income bracket got back a slightly higher percentage (3.5% to 7%) than the group below it (2.1% to 5.2%).

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