Tax refunds may be $1,000 higher on average, White House says. What to expect

Many Americans could see larger tax refunds during the 2026 filing season due to changes in President Donald Trump’s “big, beautiful bill.” However, how much this is is a matter of debate.

Various tax cuts for 2025 were added to the Trump legislation that took effect in July, and the IRS did not make this regulation. adjust payroll withholdings. Experts say that as a result, many workers overpaid taxes and these taxes will be refunded when they file their 2025 returns.

Average tax refunds could increase by “$1,000 or more” in 2026, White House says he said in a broadcast This week. The statement cited various media reports citing research conducted by investment bank Piper Sandler in early October. The memo stated that Trump’s “retroactive tax deductions could average around $1,000 per return, but for some filers the figure would be significantly greater.”

The White House statement also included a graphic With January data A forecast from the Tax Foundation, a nonprofit think tank, shows average refunds could be $3,800, an increase of $748. $3,052 For the 2024 tax year.

Another $200 billion will be set aside for tax refunds in 2026, Social Security Administration Commissioner and IRS CEO Frank Bisignano told CNBC’s “The Exchange” on Wednesday.

Piper Sandler’s research in early October estimated that 2026 refunds could increase by about $91 billion due to Trump’s 2025 tax cuts. In comparison, the Tax Foundation’s furnace analysis He said that according to private sector data, 2026 repayments could increase up to 100 billion dollars.

The predictions come as Republicans continue to support Trump’s 2025 legislation. “Working Families Tax Cuts” — and Trump promises 2026 will be “the biggest tax refund season of all time.”

Trump recently rolled out his new economic policy as many Americans struggle with rising food, utilities and other living costs. Democrats have criticized Trump over affordability as Republicans struggle to defend their House majority in a midterm election year.

The average tax refund in 2026 could be $300 to $1,000 higher than in a typical year, a Tax Foundation analysis found. historical IRS data and private sector predictionsAccording to Garrett Watson, director of policy analysis at the Tax Foundation.

“But there’s a really important caveat here,” Watson told CNBC. “That’s a pretty average value. It hides a lot of variation among taxpayers.”

For example, he said, applicants with a lot of tip or overtime income or some higher earners are likely to see “much larger refunds” than lower- and middle-class W-2 workers who get only a “slight bump” from the larger standard deduction.

for the year 2025 standard deduction increased to $15,750 for single filers and $31,500 for married couples filing jointly; $15,000 and $30,000 respectively.

By comparison, some employees can deduct up to $25,000 from tip income or $12,500 from overtime pay in 2025.

Meanwhile, the state and local tax deduction, or SALT, limit was increased from $10,000 to $40,000 for 2025. The SALT deduction includes state and local income taxes and property taxes. Most filers will not be eligible because they must itemize deductions to benefit.

Separate report published this week About 60 percent of filers will see an average tax break of about $1,200 on their 2025 returns, according to an estimate by the American Enterprise Institute. This figure represents the reduced taxes for 2025, not the size of applicants’ refunds.

Authors Kyle Pomerleau and Huaqun Li wrote that the percentage of applicants who benefit and the average tax break increase with income, with middle- and high-income applicants “likely to receive larger tax breaks” depending on the structure of the provisions.

But how tax deductions translate into refunds ultimately depends “significantly on the taxpayer’s individual characteristics,” they wrote, and whether they adjusted paycheck withholdings after the Trump law took effect.