When you get your refund from the IRS this year, you might be surprised to find it’s bigger than usual. Multiple groups of taxpayers are on track to receive larger refunds in 2026 due to tax policy changes in the One Big Beautiful Bill Act.
Several key changes in the GOP tax law, which the president signed in July, were retroactive and applied for the 2025 tax year. That means many taxpayers were likely overwithholding in the first half of last year — and beyond, unless they made adjustments.
The 940-page tax law included signature policies like “no tax on tips,” “no tax on overtime,” and the “senior bonus.” Those changes are effective for the 2025 to 2028 tax years: dates that align with President Donald Trump’s second term in office. The law also increased caps on the state and local tax (SALT) deduction, and it created a new car loan interest deduction.
All of these policies could result in higher refunds or lower tax bills for certain groups — to the tune of up to $50 billion total, according to Oxford Economics. Another forecast found that individual refunds could jump by between $300 to $1,000 this filing season.
IRS-approved: Learn how E-file.com can help with your taxes this year.
In theory, taxpayers could have reduced their withholding by submitting new W-4s after the law was passed to take advantage of the benefits immediately. Americans can also change their tax withholding from pension distributions, IRA distributions and other income streams. However, that process may simply have been too complicated for most people to do last year.
Nancy Vanden Houten, lead economist at Oxford Economics, said in a news release there was “no evidence” that a significant number of people made adjustments.
As a result, many taxpayers will get bigger refunds this spring. That’s partially by design: The Trump administration and the lawmakers who worked on the bill have celebrated the fact that it’ll put money into the pockets of American taxpayers this spring.
“Thanks to our tax cuts, millions of Americans will soon receive record setting tax refunds,” Trump said during a Jan. 29 cabinet meeting. “We’re going to be getting some pretty good refunds to a lot of people.”
Need to file your taxes? See how you can maximize your refund this year with TurboTax.
But from a personal finance angle, getting a bigger tax refund is not necessarily ideal.
While a check from the IRS can be a nice bonus, a large tax refund also indicates that a taxpayer withheld more than they needed to. Financial professionals often advise against withholding extra money, reminding consumers that a tax refund means you’ve essentially been giving an interest-free loan to the government.
The IRS has updated withholding tables for 2026, but affected taxpayers will likely need to file new W-4s if they want larger paychecks this year instead of a larger refund again in 2027.
Last filing season, the average tax refund was $3,167, according to the IRS, and the average refund was higher ($3,252) for the 2022 filing season. Exactly how much refunds will swell again this year remains to be seen.
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When you get your refund from the IRS this year, you might be surprised to find it’s bigger than usual. Multiple groups of taxpayers are on track to receive larger refunds in 2026 due to tax policy changes in the One Big Beautiful Bill Act.
Several key changes in the GOP tax law, which the president signed in July, were retroactive and applied for the 2025 tax year. That means many taxpayers were likely overwithholding in the first half of last year — and beyond, unless they made adjustments.
The 940-page tax law included signature policies like “no tax on tips,” “no tax on overtime,” and the “senior bonus.” Those changes are effective for the 2025 to 2028 tax years: dates that align with President Donald Trump’s second term in office. The law also increased caps on the state and local tax (SALT) deduction, and it created a new car loan interest deduction.
All of these policies could result in higher refunds or lower tax bills for certain groups — to the tune of up to $50 billion total, according to Oxford Economics. Another forecast found that individual refunds could jump by between $300 to $1,000 this filing season.
IRS-approved: Learn how E-file.com can help with your taxes this year.
In theory, taxpayers could have reduced their withholding by submitting new W-4s after the law was passed to take advantage of the benefits immediately. Americans can also change their tax withholding from pension distributions, IRA distributions and other income streams. However, that process may simply have been too complicated for most people to do last year.
Nancy Vanden Houten, lead economist at Oxford Economics, said in a news release there was “no evidence” that a significant number of people made adjustments.
As a result, many taxpayers will get bigger refunds this spring. That’s partially by design: The Trump administration and the lawmakers who worked on the bill have celebrated the fact that it’ll put money into the pockets of American taxpayers this spring.
“Thanks to our tax cuts, millions of Americans will soon receive record setting tax refunds,” Trump said during a Jan. 29 cabinet meeting. “We’re going to be getting some pretty good refunds to a lot of people.”
Need to file your taxes? See how you can maximize your refund this year with TurboTax.
But from a personal finance angle, getting a bigger tax refund is not necessarily ideal.
While a check from the IRS can be a nice bonus, a large tax refund also indicates that a taxpayer withheld more than they needed to. Financial professionals often advise against withholding extra money, reminding consumers that a tax refund means you’ve essentially been giving an interest-free loan to the government.
The IRS has updated withholding tables for 2026, but affected taxpayers will likely need to file new W-4s if they want larger paychecks this year instead of a larger refund again in 2027.
Last filing season, the average tax refund was $3,167, according to the IRS,
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