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.
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.
In 2026, average tax refunds could increase “by $1,000 or more,” the White House said in a release this week. The release cited several media reports that reference early October research from Piper Sandler. That note said Trump’s “retroactive tax cuts could average about $1,000 per return though it will be substantially more for some filers.”
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, Frank Bisignano, Social Security Administration Commissioner and IRS CEO, told CNBC’s “The Exchange” on Wednesday.
The Piper Sandler research from early October estimated 2026 refunds could increase by about $91 billion from 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 — now called the “Working Families Tax Cuts” — and promises that 2026 will be the “largest tax refund season of all time.”
Trump has recently floated new economic policy as many Americans struggle with the rising costs of groceries, utilities and other living expenses. Democrats have criticized Trump on affordability as Republicans fight to defend a razor-thin House majority during a midterm election year.
How much higher tax refunds could be in 2026
The Tax Foundation analysis found the average tax refund in 2026 could be $300 to $1,000 higher compared to a typical year, based on past IRS data and private sector estimates, according to Garrett Watson, director of policy analysis at the Tax Foundation.
“But there’s a really important caveat here,” Watson told CNBC. “This is very much an average. It 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 to lower- to middle-class W-2 workers who receive only a “slight bump” from the bigger standard deduction, he said.
For 2025, 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.
By comparison, certain workers can deduct up to $25,000 in tip income or $12,500 in overtime pay in 2025.
Meanwhile, the state and local tax deduction, or SALT, limit increased to $40,000 for 2025, up from $10,000. The SALT deduction includes state and local income taxes and property taxes. Most filers won’t be eligible because you must itemize deductions to benefit.
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A separate report released this week from 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, authors Kyle Pomerleau and Huaqun Li wrote.
But how tax cuts translate into refunds ultimately “depend significantly on a taxpayer’s individual characteristics,” and whether they adjusted their paycheck withholdings after Trump’s law went into effect, they wrote.