US sees smaller April budget surplus on lower tax receipts

The U.S. saw a smaller budget surplus in April — a key month for federal revenues — as individual and corporate tax receipts dropped in the wake of President Donald Trump’s signature tax cut legislation.

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The April surplus was $215 billion, down 17% from the excess recorded in April the previous year. Total revenue came in at $837 billion for April, down 2% from a year before, the Treasury Department said in a release Tuesday. Individual tax withholdings plus Social Security and Medicare taxes came in at $288 billion, down 6%, while gross corporate levies amounted to $89 billion, marking a decline of 8%.

Spending, meantime, went up in April, thanks especially to higher interest costs to service the swelling amount of federal debt. The Treasury paid $112 billion in interest last month, up 10% from a year before. 

Tuesday’s figures offer color to the department’s notice last week of an increase in borrowing this quarter due mainly to “lower projected net cash flows.”

Net customs revenue came in at $22.1 billion for April, the smallest amount since last April, when Trump unveiled his “Liberation Day” levies. Customs revenues have now dropped for six straight months.

Tariff revenue peaked in October 2025, at over $31 billion. Last week, the administration began issuing refunds for tariffs collected prior to the ruling, further complicating the fiscal outlook. The US issued $2 billion worth of refunds on customs duties in April, the Treasury said.

Despite the smaller April surplus, the budget deficit for the first seven months of the fiscal year shrank by about 9% from 2025, to $954 billion from just over $1 trillion, according to the Treasury data.

For the fiscal year as a whole, the U.S. is expected to see a wider deficit. The median estimate of primary dealers in U.S. Treasury securities, released last week as part of the Treasury Department’s so-called quarterly refunding process, showed a $1.95 trillion gap for the year ending in September. Dealers see a further widening to $2 trillion in 2027.

The nonpartisan Congressional Budget Office in February said its new baseline was $1.85 trillion for the 2026 fiscal year, with $1.89 trillion for 2027. Those projections came before the Supreme Court struck down President Donald Trump’s emergency tariffs and a separate federal court invalidated his temporary replacement levies. Those moves will sap U.S. customs duties, which had helped shrink the deficit.

Treasury Secretary Scott Bessent has said the administration will seek to replace the revenue lost from the Supreme Court ruling by imposing tariffs using other authorities.

A federal trade court dealt the administration another blow on that front Thursday, declaring illegal a move to impose a 10% across-the-board tariff based on an authority designed to address a balance of payments crisis. The court blocked the administration from enforcing levies on two companies that sued and Washington state. 

It’s unclear what will happen with other entities that are paying the tariffs. The administration has said it will appeal the ruling.