A person checking a federal tax refund on a laptop
Source: TurboTax Facebook

Tax Refund Lower Than What You Filed? Here Are Some Possible Reasons

Anuradha Garg - Author
By

Mar. 10 2022, Published 8:45 a.m. ET

After filing their income tax returns, many people look forward to a refund. However, some may get a lower refund than they expected. Why is your tax refund less than what you filed?

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You get a tax refund when you’ve paid more taxes than you owe. The IRS processes income tax returns and issues a refund check if you overpaid. About 75 percent of U.S. filers get an annual tax refund from the IRS. According to the agency, the average 2020 tax refund was $2,800.

Why your tax refund might be lower than you expected

According to the IRS, all or part of your refund may have been used to pay off past-due federal tax, state income tax, state unemployment compensation debt, child support, spousal support, or other federal nontax debt, such as student loans.

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tax refund lower disappointed
Source: Pexels

Whereas the IRS makes offsets past-due federal taxes, all other offsets are handled by the Treasury Department’s Bureau of the Fiscal Service (BFS). If your debt meets the submission criteria for an offset, the BFS will reduce your refund by the amount needed to pay off the debt. Any portion of your remaining refund will be issued as a check or direct deposit.

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Questions about refund offset? Contact the applicable agency

To find out if you have an offset or if you have questions about an offset, contact the agency to which you owe the debt. For an agency address and phone number, call BFS’s TOP (Treasury Offset Program) call center. If you believe you don’t owe part or all of the debt, contact the agency shown on the notice. You should only contact the IRS if your original refund amount shown on the BFS offset notice differs from the refund amount shown on your tax return.

Changes in tax return after submission to the IRS

The IRS may also have changed your tax return after you submitted it. This could be for several reasons, including correcting a recovery rebate credit amount or simple math error.

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Your refund might also change if the IRS used it to pay your spouse’s past-due tax debt. If, however, you filed a joint return and you're not responsible for your spouse's debt, you can request your portion of the refund back from the IRS. For this, you’ll need to file a claim for this amount by filing Form 8379, Injured Spouse Allocation.

You can also request relief if your tax refund was offset to pay a joint federal tax debt and you believe only your spouse or former spouse should be held responsible for all or part of the balance due. The IRS will notify you and explain the changes through its Where’s My Refund? tool.

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