Noman Sabit: Thanks to a number of changes to the tax code under the One Big Beautiful Bill, Trump administration officials are projecting Americans will enjoy the largest tax refund ever in 2026.
Ways and Means Committee Chairman Rep. Jason Smith (R-MO) said in an early December memo citing an analysis by financial services company Piper Sandler that 2026 was shaping up to be “the largest tax refund season.”
“Because of the changes within the Big Beautiful Bill most taxpayers should expect to see a larger refund in 2025, but how much they receive will really depend on the specifics of their tax situation,” Adam Brewer, tax attorney with AB Tax Law, told Nexstar.
While many changes are set to take place in 2026, affecting the following year’s returns, there are notable changes for 2025, including: a higher standard deduction, a higher cap on state and local tax (SALT) deductions, an additional $6,000 deduction for seniors, no tax on tips, no tax on overtime and no tax on car loan interest, among others.
“The administration and Congress picked winners and losers. As a result, not all income is taxed equally,” Brewer said. “If your income is based largely on overtime or tips, then you could be paying much less income tax than your co-worker who is a salaried employee even if you earn roughly the same amount.”
When can Social Security beneficiaries expect their January 2026 payments?
Treasury Sec. Scott Bessent echoed Smith in a recent interview with a local Philadelphia NBC station, saying that Americans are set to receive “very large refunds.”
“The bill was passed in July. Working Americans didn’t change their withholding, so they’re going to be getting very large refunds in the first quarter,” Bessent said. “I think we’re going to see $100 [billion]-$150 billion of refunds, which could be between $1,000 and $2,000 per household.”
Bessent added that once withholding levels adjust, they’ll see a bump in take-home pay.
To be clear, a larger refund doesn’t mean taxpayers are increasing their income. Rather, the refund money was just over-withheld during the year, and is being returned to the taxpayer.
Still, not all American taxpayers are projected to benefit from the Trump administration’s signature bill.
According to multiple analyses by nonpartisan, independent think tanks, the bill overwhelmingly favors some of the highest earners and businesses in the country.
A Congressional Budget Office analysis found that those in the top 10 percent would see an additional $12,000, while those in the poorest 10% would lose $1,600 annually, while also cutting Medicaid and food assistance.
“What I am telling my clients is that if they receive a larger refund than prior years then it will be a pleasant surprise, but don’t spend in anticipation of a large refund just yet,” Brewer said.
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