Americans will depend on refunds to pay for necessities this tax season 

  • Nearly one-third (32%) of taxpayers are dreading filing their taxes this year 
  • Of those who expect a refund, 37% say they will use some or all of their refund to pay for necessities 
  • Think you might owe? Of taxpayers expecting to pay this year, 23%  expect to take on debt to pay their tax bill this year

Today marks the official opening of the IRS, which means organized tax filers who have received all of the necessary paperwork can begin filing their 2023 taxes as soon as today. While the majority of Americans save filing their taxes until closer to the April 15 deadline, many are eager to file early so they can get their refund sooner.

According to a new study conducted by Qualtrics on behalf Intuit Credit Karma, more than half (54%) of American taxpayers plan to file their taxes early so they can get their refund sooner. Younger filers are likely to be first in line with 64% of Gen Z and 65% of millennials saying they plan to file early this year. This sense of urgency may stem from Americans’ dependence on their refund as many struggle to keep up with their finances. 

According to the study, 31% of taxpayers say they will depend on their tax refund to make ends meet. That number jumps to 40% for millennials and 38% for Gen Z taxpayers. Of those who depend on their refund to make ends meet, more than half (56%) say they’re dependent on their refund because of the rising cost of living. Others say living paycheck to paycheck (46%), inflation (45%) and depleted savings (25%) have made them more dependent on their refund.  

Student loan obligations could put a damper on refunds this year

For some American taxpayers, student loan repayments have made them more reliant on their tax refund. Of respondents who have outstanding student loan debt, 44% say they’re more reliant on their tax refund this year because student loan payments have resumed, biting into their monthly budgets. This number rises to 54% for Gen Z and 48% for millennials who have outstanding student loan debt.  

For some, student loan repayments are a top priority – even over taxes. Nearly a quarter (23%) of respondents with outstanding student loan debt say they plan to delay paying their taxes to prioritize paying down their student loan debt, with Gen Z being the generation most likely to prioritize repayments over their tax bill (36%).

Many Americans expect refunds to be bigger than last year 

Three-quarters (75%) of American tax filers expect a refund this tax season and more than a quarter (27%) expect that refund to be bigger this year compared to last. Gen Z and millennial taxpayers were the generations most likely to express expectations of raking in more cash this tax season with 45% of Gen Z and 36% of millennial tax filers expecting a bigger refund this year. Of those who expect money back from the government, one-third (33%) say they expect a refund of $1,001 or more and 16% say they expect north or $2,501. 

Don’t spend it all in one place 

That’s a good chunk of change and, for many, it’s the biggest windfall of the year. So, how will American taxpayers use this infusion of cash? According to the study, 37% of Americans who expect a refund this tax season will use some or all of their refund to pay for necessities, such as recurring bills, rent and groceries. Another 34% say they will use the money to pay down debt, including credit card debt (66%), personal loan debt (26%) and medical debt (19%). 

However, not all refunds are going toward essentials. One-in-five (20%) of tax filers say they will use their tax refund to splurge on things they otherwise wouldn’t buy, such as travel or making a big purchase, like a car or appliance. Gen Z and millennials were the most likely to admit plans to splurge, 29% and 28% respectively.  

Despite high hopes about refunds this year, 36% are worried they might actually owe money this tax season. 

Debt and Taxes 

Of those who don’t expect a tax refund this year, 35% are worried they won’t be able to afford their tax bill. As a result, nearly a quarter (23%) of respondents who don’t expect a tax refund say they will likely take on debt to pay their tax bill this year with 15% saying they plan to use their credit card to pay their tax bill. This comes at a time when credit card interest rates sit at record highs, which could cost consumers more in interest. Others who expect to owe money this year plan to dip into their savings or emergency savings (37%) or even borrow money from a friend or family member to pay their bill (7%). 

“Refunds are often the largest windfall for Americans and many rely on this annual infusion of cash to make ends meet, pay off debt or kick off savings for the year ahead,” said Courtney Alev, consumer financial advocate and Head of Tax at Intuit Credit Karma. “Americans’ dependency on refunds may be heightened this year as many grapple with the increased cost of living, which has led many Americans to live paycheck to paycheck. Whether you’re expecting a refund this year or you think you might owe money, my number one tip is to make a plan. There are tons of online tools you can use to estimate your refund, which will give you an idea of how much you might receive, or how much you might owe. From there, you can make a plan for how you’re going to use that money or how you’re going to pay for your tax bill. If you do owe money and are considering financing your tax bill with a credit card – think again. Credit card interest rates are at record highs, which means you could end up spending a lot more in interest to cover your tax bill. If you can’t afford to pay your bill off at once, you should look into setting up a payment plan with the IRS, which offers short- and long-term payment plans, including special programs for low income filers.” 


This survey was conducted online within the United States by Qualtrics on behalf of Intuit Credit Karma on January 22 to January 24, 2024 among 3,012 adults ages 18 and older who plan to file their taxes this tax season.