Introduction to Tax Refunds in 2026
Many Americans could see bigger tax refunds during the 2026 filing season based on changes from President Donald Trump’s “big beautiful bill.” But just how much is a matter of debate. The IRS CEO, Frank Bisignano, stated that $200 billion more will go out for tax refunds, which is significantly higher than initial estimates.
Enacted in July, Trump’s legislation added several tax breaks for 2025, and the IRS did not adjust paycheck withholdings. As a result, many workers overpaid taxes and will be refunded when filing 2025 returns, experts say. The average tax refund could increase “by $1,000 or more,” according to the White House, citing several media reports that reference early October research from investment bank Piper Sandler.
Estimating Tax Refund Increases
The White House release also included a graphic with January data from the Tax Foundation, a nonprofit think tank, showing estimated average refunds could be $3,800, up $748 from $3,052 for tax year 2024. In 2026, $200 billion more will go out for tax refunds, according to Frank Bisignano, Social Security Administration Commissioner and IRS CEO.
The Piper Sandler research from early October estimated 2026 refunds could increase by about $91 billion because of Trump’s 2025 tax cuts. By comparison, the Tax Foundation’s January analysis said 2026 refunds could rise by up to $100 billion, based on private-sector data. The estimates come as Republicans continue to promote Trump’s 2025 legislation — which they are now calling the “Working Families Tax Cuts” — and Trump promises that 2026 will be the “largest tax refund season of all time.”
Understanding Tax Refund Variations
The Tax Foundation analysis found the average tax refund in 2026 could be $300 to $1,000 higher compared with a typical year, based on past IRS data and private sector estimates, according to Garrett Watson, director of policy analysis at the Tax Foundation. However, Watson notes that “this is very much an average” and “does conceal a lot of variation between taxpayers.”
For example, filers with a lot of tips or overtime income, or certain higher earners, are likely to see “much greater refunds” compared with lower- to middle-class W-2 workers who receive only a “slight bump” from the bigger standard deduction. The standard deduction rose to $15,750 for single filers or $31,500 for married couples filing jointly, up from $15,000 and $30,000, respectively.
Impact on Filers
A separate report released this week by the American Enterprise Institute projected that about 60% of filers will see an average tax cut of nearly $1,200 for 2025 returns. This figure refers to reduced taxes for 2025, not the size of filers’ refunds. The percentage of filers who benefit and the average tax cut rise with income, with middle- and high-income filers “likely to receive larger tax cuts” based on the structure of the provisions.
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Smart Tip for Readers
To maximize your tax refund, it’s essential to review your paycheck withholdings and adjust them accordingly to avoid overpaying taxes throughout the year. Consider consulting a tax professional to ensure you’re taking advantage of all eligible deductions and credits.
