What's Happening?
The Internal Revenue Service (IRS) has announced that tax refunds for the 2026 filing season are expected to be significantly larger, potentially increasing by up to 30%. This change is attributed to new provisions from President Donald Trump's tax and
spending bill. The IRS has updated its withholding tables, which means that future paychecks will reflect the new tax laws. However, refunds may be larger as employers might have withheld more taxes than required. Taxpayers can track their refunds using the 'Where’s My Refund?' tool on the IRS website or by calling 800-829-1954. The IRS emphasizes the use of electronic direct deposit as the fastest and safest way to receive refunds.
Why It's Important?
The increase in tax refunds is significant for millions of Americans who rely on these refunds as a major financial boost each year. With the average refund in 2025 being $2,939, a 30% increase could mean a substantial financial impact for taxpayers. This change could stimulate consumer spending, as larger refunds may lead to increased purchasing power. Additionally, the IRS's push for electronic direct deposit aims to reduce the risk of lost or delayed payments, ensuring that taxpayers receive their refunds more securely and efficiently.
What's Next?
Taxpayers are encouraged to file their returns electronically and opt for direct deposit to expedite the refund process. The IRS will continue to update taxpayers on the status of their refunds through the 'Where’s My Refund?' tool. For those claiming the Earned Income Tax Credit or the Additional Child Tax Credit, refunds will not be issued before mid-February, with most expected to be available by March 3. Taxpayers should ensure their banking information is accurate to avoid delays.
