You’ll Get the Biggest Tax Refund If You Live In This State (Hint: It’s in the West!)

Filing taxes is definitely not a task that people enjoy (and if you do, well, good for you). But for many of us, the silver lining of doing our taxes is the chance of a refund. Okay yes, getting a refund means you paid too much in taxes and it’s a reimbursement, but hey, that amount can feel like “free” money when it lands in your account. 

The refund amount depends on a bunch of factors and it can vary from person to person. One of those factors can be where you live, so financial technology company SmartAsset recently put out a 2023 report on the states with the largest tax refunds so people can see how their place of residence stacks up.

In general, SmartAsset found that for the 2021 tax year (with returns filed in 2022), the average federal refund was $1,798. For the rankings, the SmartAsset team looked at the average dollar amount of 2021 federal tax refunds for all states, plus the District of Columbia.

The state with the largest average federal tax refund was Utah, with an average amount of $1,812. SmartAsset says the state’s average may have been boosted from tax credits for children since the average household size in Utah was higher than any other state in 2021. 

Two other Western states made the top 10, with Wyoming coming in second with an average federal tax refund of $1,802. Interestingly enough, that number was calculated from only 1 million federal tax refunds issued, and the state had the fewest number of tax refunds issued compared to other states in 2021. Alaska was number six with an average refund of $1,734 in 2021 and a total of 1.3 million federal refunds issued that year. Both Wyoming and Alaska are income-free states. Take a look at the rankings below and see the whole report here.

Top 10 States with the Largest Federal Tax Refunds

1. Utah: $1,812

2. Wyoming: $1,802

3. Texas: $1,783

4. North Dakota: $1,750

5. Illinois: $1,739

6. Alaska: $1,734

7. Kansas: $1,728

8. South Dakota: $1,721

9. Nebraska: $1,716

10. Oklahoma: $1,715

While a big refund might sound nice, the SmartAsset team does say that getting little to no refund might not be a bad thing since it just means you didn’t pay more in taxes than you should have. “That money may have been working harder for you by gaining interest in a bank account, earning returns in an investment fund or paying for living expenses,” Susannah Snider, certified financial planner and managing editor for financial education at SmartAsset, said in a press release.

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