Here’s How Much More Money Americans Will See In Their Tax Refunds Thanks To Trump’s Signature Bill
American taxpayers are poised to see a sharp increase in their tax refunds this year, with the average payout expected to rise by about $1,000. The White House estimates that an additional $100 billion will be returned to filers during the 2026 tax season as a result of President Trump’s signature second-term tax legislation.
The tax filing season officially opened Tuesday, and Treasury Department projections show that refunds are expected to total $429 billion — a dramatic increase from the $329 billion issued last year.
With refunds climbing by roughly $1,000 per filer, the average check is projected to top $4,000.
“Millions of Americans are poised to receive significantly larger tax refunds thanks to President Donald J. Trump’s landmark Working Families Tax Cuts Act — which every Democrat in Congress opposed,” the White House said in a statement, referring to the legislation also known as the One Big Beautiful Bill Act.
“The historic legislation is delivering the biggest tax refund season ever.”
Data cited by The Wall Street Journal shows that last year more than 60% of U.S. households received refunds averaging $3,167.
The spike in refunds is the result of targeted changes embedded in the One Big Beautiful Bill Act, the sweeping Republican tax overhaul signed into law last year by President Donald Trump.
Under the law, Republicans made the tax cuts retroactive to the 2025 tax year while leaving IRS withholding tables unchanged. As a result, workers continued to have taxes withheld at higher rates throughout the year, with the benefits of the cuts now being paid out in large lump sums just months ahead of the midterm elections.
Although only about 60% of filers receive refunds, those who do are seeing substantially larger amounts.
According to the Tax Foundation, roughly one-quarter of the individual tax cuts stem from raising the state and local tax deduction cap to $40,000.
The single largest factor driving higher refunds is the new overtime deduction, which accounts for approximately $38.7 billion — or 30% — of the $129 billion in individual tax relief included in the law for 2025.
Additional contributors include an expanded standard deduction, a new bonus deduction for seniors, an increased child tax credit, and new deductions for tips and auto loan interest.
The surge in refunds is arriving as the IRS operates with significantly fewer employees than it had a year ago, raising concerns about the agency’s ability to process returns and issue payments smoothly.
The IRS started last year with more than 100,000 workers and is now estimated to be about 25% smaller following layoffs and retirements.
While many of the staffing reductions affected enforcement divisions, call centers and paper correspondence units are under the greatest strain, particularly as many taxpayers — especially older filers — continue to rely on phone assistance.
Despite the staffing cuts, the IRS says it expects to process approximately 164 million tax returns this year, roughly the same as last year, and maintains that its systems are prepared. Critics, however, warn that fewer workers handling a much larger volume of money leaves little room for mistakes.
David A. Perez, CEO of Tax Maverick AI, said the scale and structure of this year’s refund surge are unusual compared with previous tax cuts.
“This is not how tax relief is usually delivered,” he told The Post.
“Typically, when the government cuts taxes, withholding tables are updated so people see a little more money in every paycheck. That didn’t happen in 2025.”
Because the One Big Beautiful Bill Act was applied retroactively while withholding remained unchanged, Perez said, “taxpayers were effectively forced to save that money with the Treasury for a year — and now it’s all being released at once.”
Perez, whose company has prepared more than 50,000 tax returns since 2018, said the projected $429 billion in refunds represents about a 30% increase from last year, a jump he has not seen outside of extraordinary circumstances.
“I haven’t seen a manufactured windfall quite like this since the stimulus checks,” he said.
“But this is different, because it’s baked directly into the tax return itself.”
Perez added that lump-sum refunds tend to generate a stronger economic impact than incremental increases in take-home pay.
“Behaviorally, people treat a lump sum very differently than a small weekly raise,” he remarked.
“An extra $50 a week usually gets absorbed by groceries or gas. But a $4,000 refund in February feels like investable cash. People use it for big-ticket items — car down payments, vacations, or paying off high-interest credit card debt.”
As a result, Perez said he expects a burst of consumer spending early in the year.
“President Trump delivered the largest tax cut in history for middle- and working-class Americans, lowering taxes in every county in every state across the nation,” White House spokesperson Kush Desai told The Post.
“This tax relief will allow American families to keep more of their hard-earned money and unleash economic growth and prosperity not just during tax season, as millions of Americans receive refund checks, but for years to come.”
“This is yet another promise made, promise kept as President Trump continues to Make America Great Again.”
{Matzav.com}
