President Donald Trump’s signature tax bill could lead to unusually large refunds for many Americans in the first quarter of 2026, according to Treasury Secretary Scott Bessent.
Speaking on the All-In Podcast on Tuesday, Bessent—who is also serving as the acting IRS commissioner—said the retroactive provisions in the One Big Beautiful Bill Act (OBBBA) could leave households seeing “$1,000, $2,000 refunds” when they file early next year.
Why It Matters
For a lot of households, a tax refund is the biggest single payment they receive all year. The administration has framed the expected increase as welcome relief for families facing higher costs and tight budgets.
Still, independent groups have cautioned that the broader package could add significantly to the national deficit, and that a large share of its benefits may flow to higher-income individuals and businesses. The Congressional Budget Office has projected that households in the top 10 percent would average about $12,000 more over the 2026–2034 period, while households in the bottom 10 percent could lose roughly $1,600 per year—partly tied to reductions in Medicaid and food assistance.
What To Know
Bessent has been signaling for months that 2026 refunds could be notably higher than in recent years because the OBBBA’s changes apply retroactively to the start of 2025. Trump signed the legislation into law in July.
The White House has also pointed to recent research from financial services firm Piper Sandler. The firm, as quoted by CBS, estimated the typical refund could rise by about $1,000 versus the 2025 filing season, reaching $4,151 per filer.
The expected bump is tied to the bill’s retroactive tax breaks—especially provisions affecting earnings such as tips and overtime—combined with the likelihood that many workers didn’t adjust withholding (the amount taken out of paychecks during the year) after the law was enacted.
During a podcast in October, Piper Sandler economist Don Schneider said withholding likely stayed the same for many employees because the value of the retroactive cuts is hard to predict while the year is still underway.
“People really aren’t adjusting their withholding this year. It would be pretty difficult to do so—you don’t even know how much of a tax cut you’re going to get from overtime or tips or something,” Schneider said, adding, “When people go to file, I think they’ll be surprised by really, really large refunds.”
He also suggested the overall scale could be historic.
“In a typical year, we might have about $270 billion in individual income tax refunds, and that could be as high as that plus another $90 billion,” he said. “So it could be one of the largest refund seasons ever.”
At the same time, Schneider noted the gains may not be evenly distributed, describing the benefits as “really concentrated in kind of the middle- and middle-upper income part of the income distribution.”
What People Are Saying
Treasury Secretary and acting IRS Commissioner Scott Bessent told NBC10 Philadelphia in early December: “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. I think we’re going to see $100-$150 billion of refunds, which could be between $1,000, $2,000 per household. Then they’ll change their withholding, and they’ll get a real increase in their wages.”
What Happens Next
Tax filing season begins in January, with most Americans preparing their returns before the April 15 deadline. Refunds are typically issued within 21 days.
