White House: 2026 Will Bring Largest Tax Refunds in American History

The White House is projecting that Americans will receive the biggest tax refunds in U.S. history next year, thanks to retroactive cuts embedded in President Trump’s Big Beautiful Bill.

Although the legislation wasn’t signed into law until mid-2025, many of its tax breaks applied retroactively to January 1. Because the IRS didn’t update payroll systems in time, most Americans continued to have higher taxes withheld throughout the year — setting up a massive refund windfall when they file their 2025 taxes.

“We didn’t pass the Big Beautiful Bill until the middle of the summer, so a lot of the tax changes which affected last year were not in any tax forms filled out in the beginning of the year,” said White House National Economic Council Director Kevin Hassett.

According to Treasury Secretary Scott Bessent, the result will be “between $100 billion and $200 billion of refunds,” translating to an estimated $1,000 to $2,000 per household.

JPMorgan analysts are even more bullish, predicting over 100 million Americans will receive refunds averaging $3,743.

Several provisions in the law are fueling the surge. These include:

• A higher standard deduction — increased by $750 for single filers and $1,500 for joint filers.

• A temporary expansion of the SALT deduction cap from $10,000 to $40,000.

• New deductions for working-class Americans, such as:

  • Up to $25,000 in tax-free tip income

  • Up to $12,500 in overtime deductions

The bill also made major changes for families, seniors, and small business owners:

• Boosted the child tax credit

• Made the paid leave credit permanent

• Increased the estate tax exemption

• Created tax-free “Trump Accounts” for children

• Added a $6,000 deduction bonus for Americans over 65

President Trump celebrated the changes, predicting “many families will be saving between $11,000 and $20,000 a year.”

The White House expects the influx of refunds to inject significant consumer spending into the economy in early 2026. Treasury Secretary Bessent added that even the 2025 holiday season may see a boost from Americans anticipating large refunds: “If consumers are confident that they will be getting bigger refund checks early in the new year, they may be willing to rack up more credit card debt in December, providing further near-term support to the economy.”

With the Big Beautiful Bill now fully implemented, the Trump administration is preparing for what it hopes will be a landmark year of economic expansion.