The U.S. Treasury said on April 10 that the federal budget deficit for March widened to $164 billion, an increase of $4 billion or 2% compared with the same month a year earlier. The rise was driven in part by sharply higher tax refunds stemming from recent individual and corporate tax breaks, along with larger relief payments to farmers.
Receipts in March reached $385 billion, up $17 billion or 5% from March 2025. Outlays for the month totaled $549 billion, a rise of $21 billion or 4% from a year earlier.
Defense and war-related spending
The monthly data did not display a large near-term jump in spending tied to the conflict in Iran. Military and defense program outlays increased by $2 billion, or 3%, to $65 billion during the first month of the conflict. A Treasury official cautioned that many war-related costs - including expenditures such as replenishing weapons inventories - are expected to be recorded in later months rather than immediately.
Trade receipts and customs duties
Customs duty collections softened in March, a change the Treasury linked to the timing after the U.S. Supreme Court annulled the broadest set of global tariffs that had been imposed under an emergency law. Customs receipts were $22.2 billion in March, down from $26.6 billion in February and below the monthly totals in the low $30 billion range seen late last year. Nevertheless, customs receipts were higher than the $8.2 billion reported in March 2025.
Alternative accounting adjustment
The Treasury noted that after accounting for calendar-related adjustments to benefit payments, the March deficit would have been $250 billion, up $9 billion or 4% compared with March 2025. That adjusted figure reflects timing differences in benefit disbursements rather than changes in the underlying annual fiscal trajectory.
The monthly report highlights how timing and policy-driven tax changes can influence short-term budget dynamics. It also underscores the potential for future spikes in war-related spending once delayed outlays, such as inventory replenishments, are recorded.