Treasury Secretary Scott Bessent said Americans could see unusually large tax refunds during the 2026 filing season, arguing that tax cuts in President Donald Trump’s One Big Beautiful Bill Act (OBBBA) will leave many taxpayers owed money when they file.
Bessent, who is also serving as acting IRS commissioner, made the comments on the “All-In Podcast.” He said the law’s tax provisions were applied retroactively to the start of the year, but most workers did not adjust their withholdings after the bill was signed in July. That mismatch, he said, could translate into larger refund checks next year.
“I can see that we’re gonna have a gigantic refund year in the first quarter because working Americans did not change their withholdings,” Bessent told the podcast hosts. “I think households could see, depending on the number of workers, $1,000- $2,000 refunds.”
A similar expectation was laid out by the Tax Foundation, a nonpartisan tax policy nonprofit. In a Dec. 17 report, the group said “refunds will be larger than typical in the upcoming filing season because of the One Big Beautiful Bill Act’s (OBBBA) tax cuts for 2025.”
The foundation estimated the OBBBA reduced individual taxes by $144 billion for 2025, adding that other analyses suggest as much as $100 billion of that could show up as higher refunds. It cautioned that not everyone will see a major increase, but said the law’s savings could raise average refunds by up to $1,000.
“But because the IRS did not adjust withholding tables after the law passed, workers generally continued to withhold more taxes from their paychecks than the new law required. As a result, instead of gradually receiving the benefit of the tax cuts through higher take-home pay during the year, most taxpayers will receive it all at once when they file their returns,” the Tax Foundation wrote.
The Tax Foundation identified seven major tax cuts under the OBBBA that could contribute to higher refunds, including increases to the child tax credit and standard deduction, a higher SALT deduction cap, and new or expanded deductions for seniors, auto loan interest, tip income and overtime pay.
