The US State With The Lowest Average Tax Refunds

The time comes each year to boot up your TurboTax account or whichever vessel you typically choose to file your taxes for the fastest tax refund and get to work. However, in reality, there's no need to rush into this process, as the deadline for filing is April 15th. For that reason, it's understandable if you, like many people, are in no rush to start filing.

Either way, depending on what income bracket you're in, tax season could be a tedious and expensive process. But at the same time, while the actual process of filing your taxes is generally boring, for some people, receiving their yearly tax return is a great opportunity to pay for that vacation they've been planning or knock off some credit card debt. Still, unfortunately, depending on which U.S. state you live in, you may get more money from your tax return than others. That being said, let's explore the U.S. states with the lowest average tax refunds to find out.

For most Americans, the process of filing your taxes is nothing short of a tedious annual chore that your government requires you to do. At the same time, if you're using a website like TurboTax or H&R Block, plugging in your W2 and inputting your information isn't that difficult of a task, and at the end, you receive a reward for doing so. However, the amount that individuals receive varies pretty widely based on things like annual income and location. What this inevitably leads to is certain states receiving higher average refunds than others. That being the case, let's see which states rank the highest in this regard.

In 2022, a study was done by GOBankingRates to analyze public data based on individual tax returns by state to figure out which ones are paying out the most, and which ones are paying out the least. The study analyzed the total amount of money sent out as returns, by state, and dividing that by the total amount of returns that were filed. What they discovered is that during that time frame, the states with the highest average tax return were Florida, Wyoming, and Texas. The average annual tax refund in Florida was $1,994, Wyoming was $1,950, and Texas was only a dollar behind that at $1,949.

On the other hand, in the aforementioned study, it was discovered that the top three states with the lowest average tax refund were Idaho, Oregon, and Maine. Maine, on average, paid out $1,567 per person, and Oregon paid out an average of $1,540 per person. Idaho unfortunately came out on top of this list, paying out $1,370 per person on average.

This being the case, if you do indeed live in any of the three aforementioned states, don't worry. Just because your state paid out some of the lowest average tax returns in the country for the time period when the study was undertaken does not also mean that the actual states themselves have a higher poverty rate than the rest of the country. The top 3 poorest states in the country for 2024 were instead Mississippi, Louisiana, and West Virginia in order. In fact, Texas, which saw the third-highest average tax returns for the aforementioned study, actually ranked at number 10 for the top 10 poorest states in the country for 2024. Either way, any of the aforementioned data on tax returns could be subject to change in 2025. For that reason, understanding what you need to know about IRS tax refunds will help you maintain a grasp on what to expect.