Florida Tops Federal Tax Refund Rankings as No-Income-Tax States Dominate

Florida logged the highest average federal tax refund of any state this spring at $4,433, according to an Upgraded Points analysis of Internal Revenue Service data. Texas ranked second at $4,344. Together, the two no-income-tax states accounted for the country’s top two positions and more than 24 million individual returns filed.

Both states share one structural trait that most coverage glosses over: neither levies a state income tax. That single fact reshapes how workers set their federal withholding throughout the year, and it is the under-examined mechanism behind figures that look like a tax-planning win but sometimes represent an accidental, zero-interest advance to the federal government.

Top-Five States and the Refund Gap

The Upgraded Points report, which used IRS Statistics of Income data adjusted for inflation, placed both states well ahead of the remaining top-five. Wyoming ranked third at $4,282 across 280,750 returns, Nevada fourth at $4,193 across roughly 1.6 million returns, and Louisiana fifth at $4,117 across nearly 2 million returns. All five sit in the South or Mountain West, and each operates without a personal state income tax.

Filing volume adds context. Florida’s 11.1 million returns produced a 67.1 percent refund rate, meaning roughly two in three filers received a check. The Lone Star State filed 13.6 million returns, the second-largest filing volume in the country, with 71.3 percent of filers receiving payments. Louisiana posted a 73 percent refund rate, the third-highest share among all states, indicating that breadth of refund distribution is a second dimension worth tracking alongside average size.

Upgraded Points calculated state and county breakdowns using IRS Form 1040 Statistics for Tax Year 2022 as the base, adjusting dollar values upward for inflation to produce current-year equivalents. The national estimated average for this filing season came to $3,571, with 72.9 percent of taxpayers expected to receive refunds. Florida’s figure runs $862 above that national baseline, a gap wide enough to change a household’s summer budget or emergency-fund timeline.

The report covers all 50 states plus county-level detail, giving filers one of the more granular pictures of geographic refund variation available outside the IRS’s own tables. It does not represent what every resident in either state receives; it represents what refund recipients in each state averaged, a distinction that matters considerably once county-level data enters the picture.

How Zero State Income Tax Reshapes Withholding

The intuitive answer to why the top five are clustered in the South and Mountain West points to population size and income diversity. Those factors carry real weight. But a structural explanation sits beneath them, and it starts with Form W-4, the document workers file with their employer to govern how much federal income tax is withheld from each paycheck.

A single filer in Texas earning $75,000 might have their federal withholding calculated in isolation, which could easily lead to over-withholding. The same filer in New York might have their federal and state withholding calculated in tandem, often resulting in more precise withholding and a smaller refund.

That is David Kindness, certified public accountant (CPA) and founder of Your Creative CPA, describing the dynamic. In states with progressive income taxes, payroll processors often run federal and state withholding calculations together, which tends to produce a more accurate year-end tax position. Workers in no-income-tax states face a federal-only calculation that can run conservatively high by default, and many never update their W-4 to correct the drift across years.

Migration compounds the effect. Both states have absorbed millions of new residents over the past decade, many arriving from high-income-tax states. Those newcomers often carry withholding habits calibrated for their previous home state and reset their federal filing without adjusting for the different math that applies when there is no state return to reconcile. The result is a population of filers who tend to over-withhold incrementally throughout the year and collect the balance as a lump sum the following spring.

The 2026 National Refund Surge

The state-level rankings play out against a national backdrop of unusually large refunds. IRS filing season statistics through April 17 showed an average refund of $3,275 per individual return, up 11.3 percent from $2,942 at the same point in 2025, per IRS annual filing season data. Rep. Byron Donalds and Treasury Secretary Scott Bessent highlighted the jump as evidence the administration’s agenda was delivering for households, as reported in depth earlier this spring. Total refunds issued through April 17 reached $296 billion across roughly 90 million payments.

The surge is partly structural. The One Big Beautiful Bill Act (OBBBA), signed in 2025, took effect for Tax Year 2025 returns and introduced new deductions for tip income, overtime earnings, auto loan interest on new American-made vehicles, and additional benefits for senior citizens. It also lifted the state and local tax (SALT) deduction cap from $10,000 to $40,000 for taxpayers with modified adjusted gross income below $500,000, a shift the Tax Foundation tracked as a key variable in 2026 filing season outcomes. Because withholding tables had not yet caught up to the new lower liabilities, many workers were over-withheld before a single return was filed.

• $3,275: average refund per individual return through April 17, per IRS filing season data
• 11.3%: year-over-year increase in average refund size versus the same period in 2025
• $296 billion: total refunds issued through April 17, across roughly 90 million payments
• 72.9%: estimated share of 2026 filers projected to receive a refund, up from 62.8% in 2025

When County Data Complicates the Story

State averages obscure steep variation within borders. Teton County, Wyoming, home to the town of Jackson, recorded the highest county-level average in the nation at $15,156, drawn from just 15,210 returns, with only 51.9 percent of those returns producing a refund. Pitkin County, Colorado (Aspen) followed at $8,756. Utah’s Summit County (Park City) posted $8,481. In Collier County near Naples on the Gulf Coast, the county average reached $7,674.

The county-level patterns reveal something state rankings do not: very large average refunds are often driven by a relatively small number of high-income filers over-withholding on concentrated investment and capital-gains income, not by a broad population of wage earners all receiving similar checks. In Teton County, barely half of all filers received any refund at all. The state average blends that wealthy minority’s outsized checks with the majority who either owed money or received amounts well below the headline figure.

At the other end of the income distribution, filers earning below $50,000 received an average refund of $2,766 in inflation-adjusted terms, per the Upgraded Points income-level breakdown. That number anchors the picture for most workers in either state. A worker in either state earning $45,000 is not necessarily looking at a $4,433 April check; that state figure is lifted by high earners in places like Collier and Palm Beach counties who represent a minority of total returns.

High-income households also show a different refund-rate pattern. Wealthier filers are more likely to carry complex income situations with investment losses, quarterly estimated payments, and year-end adjustments that produce underpayments as often as overpayments. So the largest county-level averages reflect the widest individual swings in either direction, not the most systematic withholding miscalibration. Understanding that distinction prevents a filer from benchmarking against a state figure that their income profile cannot reproduce.

The Price Tag Hidden in a Big Refund

What the celebration of a large refund routinely omits is this: a federal tax refund is a repayment of money the government held during the year, and the IRS pays no interest on that float. A filer who received $4,433 in April effectively extended a 12-month, zero-interest loan to the federal treasury, money that could alternatively have been earning in a high-yield savings account or paying down revolving credit card debt at 20 percent or higher.

Tax Foundation researchers described the arithmetic plainly: overpaying taxes amounts to an interest-free loan to the government. At a 4.5 percent annual savings rate, $4,433 held for a full year represents roughly $200 in foregone interest. That figure is modest in isolation. Repeated for five or ten years without a W-4 correction, it accumulates into a sum that could fund a month of household expenses or close out a high-interest installment debt a year early.

Most financial planners advise households with stable, predictable income to target a small refund or near-zero balance. The forced-savings argument holds most strongly for filers who know they would spend the extra monthly cash rather than save it, in which case the tax system functions as a useful behavioral workaround. For the bulk of workers posting these averages, the volume and consistency of the state-level data points to an uncorrected default rather than a considered strategy.

Recalibrating Before Next April

For workers who want to adjust, timing matters. W-4 changes submitted early in the calendar year affect withholding across more remaining pay periods and produce a larger correction. Changes filed in October shift only the final weeks and move the needle less. The IRS recommends reviewing withholding whenever a significant life event changes a filer’s tax position. Events that typically warrant an update include:

• Marriage, divorce, or the birth of a child
• Starting or stopping a second job or freelance work
• Moving from a state with income tax to one without
• A significant change in investment, overtime, or tip income
• Newly qualifying for the Child Tax Credit (CTC) or the Earned Income Tax Credit (EITC)

Credit eligibility deserves equal attention alongside withholding. The Child Tax Credit reduces tax liability dollar-for-dollar, and filers who qualify but do not claim it are forfeiting cash outright rather than merely collecting an overpayment early. Education credits, the EITC for lower-income earners, and the OBBBA’s new deductions for tip and overtime income can all shift a refund figure substantially without any change to withholding at all.

The SALT cap increase, from $10,000 to $40,000 under the OBBBA for tax years 2025 through 2029, reshapes the refund calculation more for itemizers in high-tax states than for Sun Belt filers who have no state income tax to deduct. That asymmetry may compress the interstate refund gap in future rankings. If California and New York itemizers claim the full $40,000 deduction in sufficient numbers, the structural advantage currently separating the top five from the rest of the country could be smaller by the time the next filing season closes. The IRS Tax Withholding Estimator runs through the updated calculation in under 30 minutes and produces a pre-filled Form W-4 ready to submit to payroll.

Whether the top two positions hold next year depends in large part on how many high-tax-state itemizers adjust their filing strategy after the SALT expansion. If that correction arrives at scale, the refund gap that currently reads like a structural no-income-tax advantage will be smaller than any withholding quirk can sustain on its own.

Disclaimer: This article is for informational purposes only and does not constitute financial or tax advice. Refund outcomes vary significantly based on individual income, filing status, withholding choices, and applicable credits. Readers should consult a qualified tax professional before making changes to their withholding or filing strategy. All figures are accurate as of the publication date and are subject to revision as additional IRS data becomes available.