WASHINGTON, Jan 27, 2026, 06:21 EST
- The Treasury projects that average refunds will come in higher this season.
- The IRS kicked off the 2026 filing season, setting the deadline for returns on April 15.
- The One Big Beautiful Bill introduces new deductions that might need an additional form, Schedule 1-A.
The Treasury Department projects that tax refunds will be roughly $1,000 higher per household this year as the 2026 filing season kicks off, CNN Newsource reported Monday. Congress increased the standard deduction to $15,750 for single filers and $31,500 for married couples filing jointly, also broadening the deduction for state and local taxes, the report noted. 1
The timing is crucial. Refunds typically act as a single annual cash injection, and the initial weeks of filing season can influence consumer spending, saving, and debt repayments.
The mechanics don’t have the flair of political slogans. When employers withhold a consistent amount of federal tax from paychecks, taxpayers might end up overpaying throughout the year and then receive a refund when they file.
The IRS kicked off the filing season on Jan. 26, with a deadline set for April 15 to submit 2025 returns. It anticipates around 164 million individual filings, most of them electronic. The agency pushed for direct deposit use as it phases out paper refund checks following an executive order. Acting IRS Commissioner Scott Bessent stated, “President Trump is committed to the taxpayers of this country.” Meanwhile, IRS CEO Frank Bisignano said the agency is prepared to assist filers in meeting their deadlines. 2
The new law also introduced fresh paperwork. According to IRS guidance, taxpayers must file a new Schedule 1-A to claim specific deductions, including “No Tax on Tips,” “No Tax on Overtime,” a deduction for certain car-loan interest, and an additional $6,000 deduction for those 65 and older. Some of these breaks have limits and phase out for higher-income earners. 3
On Monday, the White House framed this tax season as the “largest” refund period in U.S. history, linking it to the Working Families Tax Cuts Act. Senate Finance Committee Republicans pointed to Treasury estimates showing refunds could reach $100 billion for families this year. Chairman Mike Crapo added the law would put “more money in their pockets.” 4
Tax Foundation leaders told Business Insider that a larger refund often signals delayed withholding adjustments just as much as a smaller tax bill. Vice president Erica York noted, “most people have overwithheld their taxes to some extent.” The group projects the average refund will climb to $3,800 for tax year 2025, up from $3,052 in 2024. But policy analyst Garrett Watson cautioned the average “might conceal a lot of variation.” 5
In a Jan. 2 Morgan Stanley podcast, economist Heather Berger said retroactive provisions in the One Big Beautiful Bill Act should appear early in the tax season, boosting refunds by “15 to 20 percent on average.” She noted that in previous years, about 30% to 45% of refunds were issued by late February, with 60% to 70% distributed by the end of March. 6
The bigger refund headline comes with a catch. Those who tweaked their withholding in 2025 might not see as much of a boost. Plus, the new deductions introduce more paperwork, which can hold up returns if the IRS records don’t line up.
