Some Americans have been shocked to see smaller tax refunds this year than they earned a year ago.
But as tax season nears the end of its third week, refund amounts are actually up. Treasury data shows that refunds are tracking slightly higher than they were during the same time last year, according to research from Morgan Stanley.
The average refund amount was down 8.7 percent for the week ending on February 8. But after factoring in data for the following week through February 14, the cumulative refund amount rose to just above where it was around the same time last year, Morgan Stanley's researchers found.
One reason for the slow start could be the 35-day government shutdown, which may have led to processing delays, the report says.
And in many cases, bigger checks are still on the way. Those claiming certain tax credits, such as the Earned Income Tax Credit (EITC) and the Additional Child Tax Credit (ACTC), won't receive any money until at least February 27. Both of these credits can result in sizable refunds, but the IRS can't issue any money before mid-February because of the Protecting Americans from Tax Hikes Act. The PATH Act delay is meant to help the IRS catch fabricated claims and safeguard taxpayers from fraud.
The key takeaway here is that early numbers don't necessarily indicate what's to come. "Refund amounts can fluctuate notably on a weekly and even daily basis," the report says.
The Treasury Department tweeted that the early reports about smaller refunds are "misleading."
"Refunds are consistent with 2017 levels and down slightly from 2018 based on a small initial sample from only a few days of data," the Treasury Department says in the tweet, which was posted on February 11.
Thanks to the the Tax Cuts and Jobs Act (TCJA), Americans can expect an average reduction of $1,610 on their 2018 taxes, according to calculations from the nonpartisan Tax Policy Center.
However, the law benefits high-income earners far more than low-income earners: "The boost in after-tax income is 0.4 percent for households in the lowest quintile, compared with 2.9 percent for those in the top quintile," TPC reports.
The TCJA also changed the rules on how much employers can withhold, and workers who didn't adjust their own forms accordingly may have had too little taken out, resulting in a lower refund or even a bill. Plus, the TCJA limited deductions, expanded tax credits for those with children and eliminated personal exemptions.
Together, all of these changes left some Americans both surprised and confused by the amount of their refund, especially those who rely on that money.
But for now, Morgan Stanley is optimistic about the amount taxpayers will get back: "There is a strong consensus around tax refunds being higher compared with last year — a side effect of the TCJA that created higher than normal overwithholding."
Like this story? Subscribe to CNBC Make It on YouTube!