Why Is My Tax Refund Different This Year? Common Reasons Explained

Your refund may differ from what you expected because the IRS corrected your return, a government agency took part of it to pay a debt (an offset), a credit was held for review, your withholding did not match your tax, or the 2025 law changes altered your bill. The IRS or Treasury mails a notice when it changes a refund.

1. The IRS corrected your return

This is the most common cause. The IRS lists math errors, credits or deductions you did not qualify for (for example, a child who does not qualify for the Child Tax Credit), tax owed from a prior year, and underpaid estimated tax. A CP12 notice means the IRS changed your refund. If you disagree, respond by the date on the notice, or you lose formal rights to appeal. See our CP12 guide.

2. An agency took part of it (offset)

Through the Treasury Offset Program, a refund can go to past-due child support, federal non-tax debts, state income tax or some state unemployment debts. An older IRS release also names student loans. BFS mails a notice showing your original refund, the amount taken and the agency that got it.

The IRS cannot see the details, so contact the agency named on the notice about the debt itself. Contact the IRS only if the "original refund" on the notice differs from your return. If you filed jointly and the debt is only your spouse's, ask about injured spouse relief. Our CP49 guide covers it.

3. A credit was held

By law, the IRS cannot release refunds for returns that claim the earned income credit (EITC) or additional child tax credit (ACTC) before mid-February, and the whole refund is held, not only the credit. For 2026, the IRS said status would update by February 21 and money would arrive by March 2. The 2027 dates were not published as of October 2026. See earned income credit.

4. Withholding and estimated payments

A refund is what you paid in minus your tax. If withholding or estimates differ from your actual tax, the result moves. The IRS suggests rerunning its Tax Withholding Estimator and giving your employer a new Form W-4. See Form W-4 withholding.

5. Bank problems and split refunds

A CP53E notice means the IRS had a problem with your bank details. It gives 30 days to add an account online or claim an exception, and otherwise a paper check follows after about six weeks. A Form 8888 split arrives in parts, and a fourth refund into one account brings a notice and a paper check.

6. The 2025 law changes

For tax year 2025 returns, the 2025 law (the One Big Beautiful Bill Act, which the IRS now calls Working Families Tax Cuts) added deductions for tips, overtime, car loan interest and seniors on Schedule 1-A. It also raised the 2025 standard deduction ($15,750 single, $31,500 joint, $23,625 head of household), set the Child Tax Credit at $2,200 and made the adoption credit partly refundable. The Child Tax Credit needs valid Social Security numbers for you and each child, issued by the due date including extensions.

Most changes applied from January 1, 2025, so withholding often missed them. The IRS reported an average refund of $3,276 through May 8, 2026, up 11.5% from $2,939 in its prior-year comparison, which says nothing about your own return. Unused adoption credit from 2020 through 2024 is also being refunded automatically. See our adoption credit update.

Example (illustration only)

Dana expected $3,000 and received $1,800. A BFS letter shows an original refund of $3,000, an offset of $1,200 to a past-due state debt and $1,800 sent. The original refund matches her return, so the IRS did not change it. She contacts the state agency about the $1,200. Had the original refund read $2,600, she would compare the IRS notice with her return. The numbers are invented.

Common mistakes

• Calling before the letter arrives.
• Missing the response date on a CP12.
• Assuming last year's refund will repeat.
• Treating an offset as an IRS error when it was a debt.

What to do next

1. Wait for the IRS or BFS notice and read it fully.
2. Compare it with your filed return.
3. If you agree with a CP12, no reply is needed. If you disagree, respond by the date shown.
4. For an offset, contact the agency named.
5. Rerun the withholding estimator and update your W-4.

A CPA can compare a notice with your return. See also where your refund is and our tax questions hub.

Frequently asked questions

General information only, not tax, legal or accounting advice for your situation. Rules, limits and deadlines change; confirm the current rules with the official source or a qualified professional before you act. Reading this page does not create a professional relationship with CPA Tax Payroll and Accounting Corp.