Overview
DA Davidson's latest weekly examination of IRS data through March 27 shows a sizable increase in tax refunds compared with the same stretch last year. Total refunds are up 13.6% year over year, a pace the firm characterizes as the strongest tax refund season since at least 2013.
Weekly performance and averages
In the most recent week, the total number of refunds processed rose 6.3% from a year earlier. At the same time, the average refund amount climbed 6.2% to $2,848. Measured in dollars, total refund payments for the week increased 12.8% versus the comparable week in the prior year, which is a moderation from the prior week’s 29.7% increase.
Filings to date
Through March 27 the IRS had received 63.0 million returns, representing just over 40% of the 145.9 million returns filed in 2025. DA Davidson notes that the year-to-date 13.6% gain places the current season on a trajectory that would represent an acceleration from the 2.0% increase recorded in 2025 compared with 2024.
Implications for retail and related sectors
DA Davidson emphasizes that lower-income households historically spend tax refunds quickly, which makes these data particularly relevant for retailers serving that demographic. The firm’s coverage list includes mass-market and discount grocers and general merchandisers such as Walmart (NYSE:WMT) and Grocery Outlet (NASDAQ:GO), apparel discounters like Citi Trends (NASDAQ:CTRN), auto parts chains, used vehicle dealers such as Carvana (NYSE:CVNA), and power sports retailers including RideNow.
The firm calls out an 83% historical correlation between year-over-year tax refund growth and fiscal first quarter retail sales growth, the latter covering the February-through-April period. Based on that historical relationship, DA Davidson interprets the current strength in refunds as supportive of positive outcomes for first quarter retail sales.
Context and caution
While the figures point to meaningful year-over-year improvement in refund activity, weekly measures show some variability - for example, the week-on-week moderation in total refund dollars from a 29.7% increase to 12.8%. The data set through March 27 captures a portion of the refund season and DA Davidson frames the results as indicative, based on historical correlations, rather than conclusive forecasts.
Note: This article reports DA Davidson's analysis of IRS data through March 27 and the firm's assessment of potential implications for retailers and related dealers.