Millions of Americans who are not legally required to file a federal tax return may still be leaving money on the table, the Internal Revenue Service warned in a tax tip published April 2.
The agency said people who had federal income tax withheld from their pay, made estimated tax payments, or qualified for refundable tax credits could be forfeiting a refund by not filing.
Credits Worth Claiming
Several refundable credits are available to eligible taxpayers for the 2025 tax year. The Earned Income Tax Credit offers a tax break for low to moderate-income workers and families, with the amount varying by income, family size and filing status. The Child Tax Credit allows taxpayers with a qualifying child to claim up to $2,200 per child, with up to $1,700 of that amount potentially refundable.
The Adoption Tax Credit, now partially refundable, is available to taxpayers who finalized or began an adoption in 2025. The maximum credit is $17,280 per eligible child, with up to $5,000 refundable. Education credits, including the American Opportunity Tax Credit and the Lifetime Learning Credit, are also available for qualifying tuition and education expenses.
Refunds Rising, But Pressures Mount
The IRS reminder comes as refund amounts climb sharply this filing season. The agency reported average refunds of $3,571 as of March 20, up 10.9% from $3,221 at the same point last year. Total refund payments have exceeded $202 billion, compared with $179 billion a year earlier. Direct deposit refunds rose 6.5% to nearly 57.3 million, with the average direct deposit refund hitting $3,561.
However, broader economic conditions may erode that purchasing power. Analysis from Goldman Sachs suggests disruptions linked to the Iran conflict could push inflation higher in 2026, with rising energy prices expected to increase transportation and food costs. Higher nominal refunds may not translate into stronger real spending power for many households.
New Accounts, Scam Warnings
More than 4 million children have been registered for Trump Accounts, tax-advantaged investment accounts seeded with a $1,000 federal contribution for children born between January 1, 2025, and December 31, 2028, under President Trump’s One Big, Beautiful Bill. IRS Chief Executive Frank J. Bisignano said eligible families simply need to check a box on a form to claim the contribution.
Experts separately warn that AI-enabled tax scams are on the rise, with fraudsters increasingly impersonating IRS officials, relatives and tax preparers through calls, emails and texts. Taxpayers are urged to verify all communications and use an Identity Protection PIN to safeguard refunds.
The filing deadline for the 2025 tax year is April 15. Taxpayers requesting an extension must still submit an estimated payment by that date.
Disclaimer: This content was produced with the help of AI tools and was reviewed and published by Benzinga editors.
Photo courtesy: Shutterstock/ Dmitry Demidovich
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