Tax Refunds Tick Up In 2025: Synchrony Financial, CapitalOne Affected

As tax season kicks into high gear, one analyst noted an increase in tax refunds that could leave taxpayers with more cash as they head into spring.

Bank of America analyst Mihir Bhatia analyzed consumer finances as we move into the final weeks of tax season.

Bhatia noted a continued increase in tax refunds by the Internal Revenue Service through 2025. Year-to-date, tax refunds are running 6% higher than they did in 2024, ahead of last year for the third straight week. This year’s average refund amount is $3,324, up 5.7% from last year.

“Higher aggregate refunds should be a tailwind for consumers, particularly lower income consumers who use tax refunds for debt paydown and big-ticket purchases,” the analyst said. “Total amount refunded running ahead on a y/y basis, well into tax season, is a positive sign for consumer balance sheets.”

Bhatia said Synchrony Financial SYF, Bread Financial Holdings Inc BFH and Capital One Financial Corp COF are the financial services companies “most exposed to consumers who will utilize tax refunds to pay down debt and for down payments on big-ticket purchases.” Synchrony and Bread specialize in private-label credit cards at retailers.

Despite President Donald Trump‘s insinuations to cut back on government assistance program funding, the analyst believes government transfer payments will tick up in 2025. This increase will be driven by social security payments rather than relief for younger individuals.

“We estimate US consumers to receive $70B more in government transfer payments in 2025 vs. 2024, driven by higher social security payments, slightly offset by an increase in student loan payments and lower SNAP payments,” Bhatia said. “Overall, while the net impact is more money in the hands of consumers, it appears the benefit would be concentrated among social security recipients, while younger individuals (student loan payments) could face some incremental pressure.”

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