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Tax season often brings with it a rollercoaster of emotions, particularly when it comes to federal tax refunds. The size of a refund can stir feelings of anxiety, anticipation, or relief among taxpayers. Smaller-than-expected refunds can cause concern, delays can trigger panic, while unexpectedly large refunds are met with joy—often leaving many wondering about the reasons behind the fluctuations.
As the 2026 tax filing season kicks off, with the IRS opening its doors on January 26, there is good news for many filers—refunds are anticipated to be larger for a significant number of taxpayers. This article delves into the potential reasons for this increase, the extent of the expected boost, and addresses some of the most common queries about tax refunds.
Looking back at recent data, the IRS reported that the average federal tax refund for the 2025 filing season, based on returns processed through December 2025, stood at $3,167. This figure marked an increase from the previous year.
I hear that tax refunds are supposed to be bigger than they were last year. How much was the average tax refund in 2025?
In comparison, the average federal tax refund for the 2024 filing season was slightly lower, at $3,138, based on returns processed through December 2024.
So, how much was the average tax refund in 2024?
In 2025, a total of 103,846,000 taxpayers received refunds amounting to $328.878 billion. This translates to 63% of filers receiving a refund, meaning more than six in ten taxpayers enjoyed a financial return from their tax filings.
How many people are we talking? How many taxpayers got refunds in 2025?
This percentage was marginally reduced from 2024, where 64% of taxpayers benefited from a tax refund. Such data highlights the annual fluctuations and trends that can impact taxpayer expectations and experiences during the filing season.
(That figure is slightly lower than in 2024, when 64% of taxpayers received a tax refund.)
Why are tax refunds expected to be bigger in 2026?
Refunds for the 2026 filing season are expected to be larger than in prior years. One reason is the One Big Beautiful Bill Act (OBBBA). OBBBA, which largely went into effect in July 2025, included expanded tax breaks, such as an increased standard deduction, larger child tax credits, and new deductions for overtime and tip income.
Despite the changes, the IRS opted not to update withholding tables, meaning many taxpayers will have paid more tax than required during the year—resulting in larger refunds when they file in 2026.
Who will see bigger tax refunds?
The size of a refund depends on your individual tax situation, but the increase in 2026 is expected to be most noticeable among middle-income households (especially those earning between $50,000 to $150,000), families with children who benefit from larger dependent credits, workers with tip or overtime income, and some older taxpayers who qualify for additional deductions.
Who won’t see bigger tax refunds?
Not everyone will see a big bump. Lower-income filers who already owe little or no tax may not experience much change, and higher-income taxpayers may benefit less due to phase-outs on some credits and deductions.
So, for those who will see a bump, how much are we talking?
Reported estimates vary—and it depends on your circumstances—but the increase is expected to average about $1,000 compared with recent years. That means that the average refund could be over $4,000.
Can we count on the same result in 2027?
Not exactly. While tax laws aren’t expected to change again, the IRS will eventually update withholding tables. That means you’ll likely see more in your paycheck during the year—but future refunds may not be as “bumped up.”
That stinks. Isn’t a bigger refund always better?
It depends on whom you ask. A larger refund usually means one of two things:
(1) You had too much withheld from your paychecks during the year, or
(2) you qualified for credits or deductions that weren’t reflected in withholding.
Neither is necessarily a bad thing, but a large refund can also mean less take-home pay during the year and is the equivalent of making an interest-free loan to the government. That’s why some tax professionals say the perfect refund is close to zero.
What is a tax refund anyway?
For federal income tax purposes, a tax refund is typically the return of money you already paid that turned out to be more than you owed. In other words, it’s the difference between what you paid in during the year through withholding and estimated payments and what your actual tax bill turned out to be. If you paid more than your tax liability, the IRS sends the excess back to you as a refund. If you paid less than your tax liability, you owe the difference.
Will bigger deductions always result in bigger tax refunds?
It depends. A deduction reduces your taxable income, but it doesn’t reduce your tax bill dollar for dollar. Whether that results in a refund depends on how much you’ve already paid in during the year. Deductions lower the amount of income subject to tax. For example, if you earn $75,000 and claim $10,000 in deductions, you’re taxed on $65,000—not $75,000. That lowers your tax bill, but it doesn’t guarantee a refund. Think of deductions as shrinking your tax bill.
Bigger deductions are more likely to result in (or increase) a refund if too much tax was withheld during the year, if you made estimated payments, or if the deduction was new or unexpected (like with OBBBA) and withholding didn’t account for it. In those cases, the deduction reduces your tax liability below what you already paid, and the excess comes back to you as a refund.
That last point? That’s why we’ll see more refunds in 2026.
What about credits?
Credits are great, but most credits, on their own, don’t create a refund. While they reduce your tax bill dollar for dollar, they generally can’t reduce it below zero.
However, some refunds result from refundable tax credits. A refundable credit can reduce your tax bill below zero, meaning you can receive money even if you owed little or no tax. The most common example is the Earned Income Tax Credit (EITC).
I’ve heard about the EITC. How does it work?
The EITC is a refundable federal tax credit designed to support low- to moderate-income workers, especially those with children. You may qualify if you have earned income from working, fall within certain income limits, and meet basic filing and residency requirements. (For example, you generally can’t claim the EITC if you file married filing separately.)
The value of the credit depends on your income, filing status, and number of qualifying children. The credit increases as income rises, then levels off, and eventually phases out as income goes higher. It’s designed to reward work while targeting benefits to those with financial need.
For many eligible families, the EITC can be worth several thousand dollars, making it one of the largest items affecting a tax refund.
I get that this can be a lot of money. Should I be worried about tax refund scams?
Absolutely. Tax refund scams are designed to steal your money, identity, or refund, with the fraudster pretending to be the IRS, a tax preparer, a bank, or even your employer.
In one common variation, scammers pose as the IRS via email, text, phone, or letter, claiming there’s a problem with your refund, that you need to verify information, or that you owe a small amount to release your refund. Remember: the IRS does not initiate contact by email, text, or social media—and it doesn’t demand immediate payment or threaten arrest.
How can I protect myself?
Be smart. Use strong passwords and two-factor authentication for tax software, and be cautious when choosing your tax preparer—always verify credentials. Check information through official channels, including the IRS website. And if you’re expecting a refund, the IRS encourages filing early to reduce the risk of identity theft.
Ok, so after I file, how long should it take to get my tax refund?
The IRS says most e-filed returns will get refunds paid by direct deposit within 21 days. Paper checks take longer (the IRS has largely discontinued paper checks but instructions about how to apply for waiver will be available on letters issued when the IRS does not receive direct deposit information) . However, certain credits—such as the EITC or the Additional Child Tax Credit—legally delay refunds until mid-February.
How can I check the status of my tax refund?
The best—and safest—way to check the status of a federal tax refund is directly through the IRS. The Where’s My Refund? tool is available at irs.gov or through the IRS2Go mobile app. You’ll need your Social Security number (or ITIN), filing status, and the exact refund amount shown on your return. Refund status usually appears within 24 hours of acceptance for e-filed returns and about four weeks after mailing a paper return. The tool updates once per day, typically overnight.
If I don’t get my refund when I expected it, should I call the IRS?
Good luck getting through. It’s tough on the best of days—and even harder during tax season. That said, calling generally makes sense only if it’s been more than 21 days since you e-filed, more than six weeks since you mailed your return, or the Where’s My Refund? tool specifically tells you to call. Before that point, phone agents typically won’t have more information than what the tool already shows.
What else do I need to know?
There’s more information to come this tax filing season, so check back with Forbes. To keep it easy, I recommend subscribing to our free tax newsletter—so the information you need lands in your inbox each Saturday morning.
