IRS Data Reveals Refund Distribution Changed by TCJA

Chris Gaetano
Published Date:
Jul 2, 2019

Recent IRS data has revealed that, while the total amount of refunds issued last filing season was mostly the same as in the previous year, the Tax Cuts and Jobs Act significantly changed the distribution of those refunds, according to the Wall Street Journal. The agency found that those making between $100,000 and $250,000 a year received fewer refunds and more penalties; the proportion of filers in this income bracket that received refunds went from 66 percent to 61 percent. The remaining brackets, though, barely budged from previous years, or, in the case of those making between $250,000 to $500,000, grew in proportion, from 41 to 46 percent. 

The data also revealed that there were fewer tax penalties in 2018 than in other years. However, those that did have penalties had bigger ones than before. The IRS collected 24 percent more in penalties from 11 percent fewer returns. 

The data also showed that 90 percent of returns used the now-expanded standard deduction, while the number of collections using the alternative minimum tax (AMT) fell sharply. The amount of revenue generated from the AMT fell dramatically in just a year within all income categories. For those making less than $250,000, AMT revenue went from $3 billion to $0.14 billion; for those making between $250,000 to $500,000, it went from $11.79 billion to $0.15 billion; for those making between $500,000 and a million, collections went from $3.47 billion to $0.15 billion; and for those making more, revenue went from $1.24 billion to $0.38 billion. 

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