Bessent Predicts Record-Breaking Tax Refunds for Early 2026 Season
Treasury Secretary Scott Bessent has stated that millions of Americans may receive the "largest tax refunds of their lives" or "gigantic" checks during the early 2026 tax filing season.
The primary reasons for these record-high projections include:
Retroactive Tax Cuts: The One Big Beautiful Bill Act (OBBBA), signed into law on July 4, 2025, included several tax provisions retroactive to January 1, 2025.
Withholding Discrepancies: Because the IRS did not update federal withholding tables after the law passed mid-year, most workers continued to have taxes deducted from their paychecks at the previous, higher rates throughout 2025. This resulted in significant overpayments that must now be returned.
New Deductions and Credits: The legislation introduced several key benefits for the 2025 tax year:
No Federal Tax on Tips and Overtime: Service and factory workers are now exempt from federal income tax on these earnings.
Higher Standard Deductions: Increased to $15,750 for single filers and $31,500 for married couples.
Senior Deduction: A new $6,000 deduction for individuals aged 65 and older.
Auto Loan Interest: Certain households can now deduct interest paid on auto loans.
SALT Cap Increase: The State and Local Tax deduction cap was raised from $10,000 to $40,000 in some scenarios.
Bessent estimates that the total volume of refunds could reach $100 billion to $150 billion, with many households seeing increases of $1,000 to $2,000 over their typical refund amounts. To facilitate these returns, Secretary Bessent announced that the 2026 tax filing season will begin early on January 26, 2026.
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