The 2025 tax season started off slow, and early data suggests a slight delay in refunds being processed. As of the week of February 21, 2025, the IRS had processed 42.4 million returns, down 3.8% compared to the same period last year (44.07 million in Feb 2024). While this delay might have caused a temporary dip in expected tax-related payments, there’s a key insight that collections teams should pay attention to: the average refund amount has increased.

A bigger refund, a strategic opportunity

The average refund stands at $3,453, a 7.5% increase from last year. This is an important signal—borrowers who typically use their tax refunds to settle debts may have more funds available once their refunds arrive. Identifying the right segments of consumers who are likely to pay using their refunds could help maximize recoveries this season.

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Delayed, not diminished: Adjust your timing

While refund processing is slower, the total refunds issued are expected to be in line with last year. This means the tax-season payment window is shifting rather than shrinking. Instead of assuming a lower volume of tax-related payments, agencies and lenders should adjust their outreach cadence to align with when refunds actually land in consumers’ accounts.

How to optimize your tax season collection strategy

1. Prioritize the right accounts – Use data-driven segmentation to target consumers who are most likely to pay with their refunds.
2. Adjust timing for outreach – Since refunds are delayed, peak payment activity may be later than usual. Monitor refund disbursement trends and adapt campaign timing accordingly.
3. Leverage personalized offers – With higher refunds, some consumers might be able to settle larger balances or commit to more favorable payment plans. Align your messaging to encourage full or partial settlements.

Final takeaway

This year’s tax season may have started slow, but that doesn’t mean the opportunity is gone—it has simply shifted. By identifying the right accounts, adjusting outreach timing, and personalizing offers, collections teams can still capitalize on refund-driven payments effectively.

Are you refining your tax season strategy based on these trends? Let’s discuss how data-driven insights can help you increase collections at the right time.