Average Tax Refunds: Connecticut, Nevada and Texas are Highest

Rural states tend to have lower federal tax refunds.
by | February 21, 2013 AT 5:30 PM

With tax season here, many taxpayers will soon await large federal refunds.

Americans’ average federal refund last year topped more than $2,800, according to the IRS. We thought it might be interesting to also take a quick look at any differences in individual income tax refunds by state.

Connecticut taxpayers recorded an average IRS refund of $3,218, the nation’s highest in 2011. Nevada ($3,192), Texas ($3,112), New Jersey ($3,099), New York ($3,071) and Louisiana ($3,006) also all exceeded the $3,000 mark.

If we factor in those taxpayers not receiving refunds, averages drop a few hundred dollars. By this measure, Nevada registered the highest refund, with an average of $2,651.

The smallest refund checks appear to be delivered to mailboxes in rural states: Montana, Maine, Vermont and North Dakota.

The following table shows federal individual income tax refund statistics, by state, for fiscal year 2011, the most recent state data available from the IRS:

Note: Figures shown are for individual income tax returns only. Fiscal year totals also vary from other published estimates.

It’s hard to draw any conclusions from this data, given all the factors at play.

Verenda Smith, deputy director of the Federation of Tax Administrators, said she suspects refunds stemming from earned income tax credits could account for much of the variation. States with high concentrations of qualifying low-income individuals and families will, in turn, end up with larger average refunds.

Of course, homeowners and taxpayers making large charitable contributions also tend to receive higher refunds. And the yearly figures don’t take into consideration how workers adjusted their withholding tax allowance.

“There are lots of reasons why an individual’s refund will vary from their next-door neighbor,” Smith said.