American taxpayers poised for record-breaking tax refunds

As the 2026 federal income tax filing season begins in the United States — with taxpayers filing their returns for the 2025 tax year — many Americans are hearing that their tax refunds may be larger than usual. Indeed, a wide range of independent analysts, tax policy researchers, and IRS reporting indicate that refunds this year are likely to be noticeably higher for many filers than in recent filing seasons. This comprehensive guide breaks down: Why refunds could be higher in 2026, What changes to tax law and IRS process are driving those…As the 2026 federal income tax filing season begins in the United States — with taxpayers filing their returns for the 2025 tax year — many Americans are hearing that their tax refunds may be larger than usual.

Indeed, a wide range of independent analysts, tax policy researchers, and IRS reporting indicate that refunds this year are likely to be noticeably higher for many filers than in recent filing seasons.

This comprehensive guide breaks down: Why refunds could be higher in 2026, What changes to tax law and IRS process are driving those expectations, How refunds will be issued and when taxpayers are likely to see them, What taxpayers can do to prepare and avoid delays

1. Opening of the 2026 Filing Season
The Internal Revenue Service (IRS) officially opened the 2026 tax filing season in late January 2026, with the filing deadline set for April 15, 2026 for most individual taxpayers.

Taxpayers can submit individual tax returns electronically (e‑file) or by mail, though most experts and the IRS strongly encourage e‑filing with direct deposit to ensure the fastest refund delivery.The IRS estimates that over 160 million tax returns will be filed this year. Millions of taxpayers are expected to receive refunds, provided they overpaid their income taxes through withholding, quarterly payments, or qualify for refundable tax credits such as the Earned Income Tax Credit (EITC) or Child Tax Credit (CTC).

2. Why Refunds Are Expected to Be Larger in 2026
There are several clear, economically grounded reasons why the average federal tax refund for the 2026 filing season — covering tax year 2025 — is expected to be larger than in recent years:

A. Tax Law Changes in 2025
In mid‑2025, Congress enacted significant tax changes that apply retroactively to the entire 2025 tax year. While some provisions continued tax breaks that were already in place, others introduced new deductions, expanded credits, and broader tax relief for households and individual taxpayers.When these changes were implemented, the IRS did not immediately change the payroll withholding tables used by employers throughout 2025.As a result, many taxpayers had more tax withheld from each paycheck than their new tax liability actually required. When these workers file their 2025 returns in early 2026, the excess withholding is expected to show up as larger refunds.

B. Expanded Deductions
New or expanded deductions can lower taxable income and increase refunds for filers who qualify.Examples of deductions that many taxpayers may benefit from include:Higher standard deductions set for the 2025 tax yearNew deductions on certain wage categoriesExpanded deferred income options and credits for specific taxpayer categories
These changes reduce the amount of income that is taxed and can directly increase a refund if withholding was based on higher tax liability assumptions.

C. Enhanced Tax Credits
A number of tax credits that directly reduce tax liability — and in some cases are refundable — were either expanded or more broadly available for the 2025 tax year. Credits such as:remain crucial factors in refund calculations, especially for moderate‑ and lower‑income households. Many credit amounts have been adjusted for inflation, and eligibility thresholds have changed, increasing the number of taxpayers who qualify.

D. Inflation‑Adjusted Brackets and Credits
Routine annual adjustments to tax brackets, standard deductions, and credit phase‑out thresholds also play an important role.These adjustments are intended to prevent “bracket creep” — where inflation pushes taxpayers into higher tax brackets without an actual increase in real income.Even though these adjustments are automatic, they contribute to lower taxable income and a larger portion of income that is effectively untaxed, which tends to boost refunds or reduce overall tax liability.
3. What Analysts Are Predicting for Refund Amounts
Independent tax analysts and credible tax research organizations have projected that average refunds in 2026 will be meaningfully higher than in recent years.

Estimated Average Refund Growth
According to current reporting:

Early IRS data suggests the average refund for 2026 could exceed $4,000, which is roughly about $1,000 more than the average refund in the previous year.

Independent studies indicate that changes in withholding tables and retroactive tax relief could add hundreds to around $1,000 more per filer than a typical filing season.Refunds Involving Certain Credits May Be Delayed
Refunds that involve refundable credits such as the Earned Income Tax Credit (EITC) or Additional Child Tax Credit (ACTC) are subject to statutory processing rules that require the IRS to hold those refunds until mid‑February or later. These rules are designed to reduce fraud and verify eligibility.

Paper Checks Being Phased Out
In an ongoing modernization effort, the IRS has begun phasing out paper refund checks. Starting in the 2026 filing season, most taxpayers must provide direct deposit information to receive refunds electronically. This reduces delays, lost checks, and fraud associated with mailed paper checks.

Tracking Your Refund
Taxpayers can monitor the status of their refund using the IRS’s tools:

“Where’s My Refund?” on the IRS website

The IRS2Go mobile app

An IRS Individual Online Account

These tools are updated daily with the latest refund status once a return is accepted.

6. Common Reasons Refunds May Be Delayed
Even in a normal tax season, there are several reasons a refund might take longer:

Errors or missing information on tax returns

Identity verification issues requiring additional processing

Refunds involving refundable credits like EITC or ACTC (statutory hold)

Complex returns with multiple forms or schedules

7. IRS Staffing and Operational Challenges
Independent reports and IRS internal analyses have noted that the IRS is implementing new tax laws while also managing shifts in staffing levels and operational changes.

These include the transition away from paper checks and adapting to new forms and systems required to implement recent tax law changes.

While these changes may slightly affect processing times for some taxpayers — particularly those with complex returns or verification issues — most electronically filed returns with direct deposit are expected to be processed efficiently.