MILLIONS TO GET EXTRA $775 REFUND, IRS CHIEF SAYS
Millions of Americans are receiving larger tax refunds this year, with the average refund rising by about $775 for filers who claim newly enacted tax breaks, according to the head of the Internal Revenue Service (IRS).
IRS CEO Frank Bisignano told lawmakers during a House Ways and Means Committee hearing on Wednesday that more than four in 10 of the roughly 55 million tax returns filed so far have included at least one of the new deductions created under President Donald Trump’s recently passed tax law.
Why It Matters
The IRS says refunds are already running higher this year, with the average refund reaching $3,804, about 10 percent more than at the same point last year, even before accounting for the full impact of the new deductions.
The additional $775 on average is likely to impact taxpayers who claim at least one of the new deductions.
What To Know
When the new deductions approved under the Trump administration are claimed, refunds are, on average, hundreds of dollars higher than last year, according to Bisignano.
The new tax provisions include deductions for overtime pay, tipped income, senior bonuses and incentives tied to purchasing American‑made vehicles.
Bisignano said the $12,500 overtime‑pay deduction has been the most commonly used so far, while a $6,000 bonus for seniors has resulted in the largest increases for individual refund amounts.
“Higher refunds are being driven by a few things. It’s a combination of larger child tax credits—$1,700 of which is refundable—and the increased standard deduction,” Kevin Thompson, the CEO of 9i Capital Group and the host of the 9innings podcast, told Newsweek. “Those with children will likely see the biggest benefit, as credits reduce taxes dollar for dollar, and the refundable portion can come back to you even if you owe little or nothing in taxes.”
According to the IRS, the households benefiting most from the new deductions are those with adjusted gross incomes below $100,000, meaning changes are primarily affecting middle‑ and lower‑income filers. And if current trends continue, the average refund boost for eligible filers could climb to as much as $1,000 by the end of tax season, Bisignano said.
Early IRS data shows that overall refunds are already trending higher. Through late February, the average refund issued was $3,804, about $351 more than at the same point last year, representing a roughly 10 percent increase.
“Americans may see slightly larger refunds this year for several reasons tied to the OBBBA, especially retirees receiving enhanced deductions,” Thompson said. “We’re seeing some retirees save between $700 to $2,100 in taxes due to these changes.”
What People Are Saying
Alex Beene, a financial literacy instructor for the University of Tennessee at Martin, told Newsweek: “Some of the new tax breaks included in the One Big Beautiful Bill Act are generating most of the boosts to refunds this year, with the most prominent being the additional credits for seniors and reduction in taxes on overtime. Perhaps most positive in these developments is data indicating the refunds are primarily benefiting households of under $100,000 in income, one the groups hit hardest by inflationary pressures of the last few years.”
Drew Powers, founder of Illinois-based Powers Financial Group, told Newsweek: “While a bigger refund is nice, most Americans will find any additional amounts have already been negated by inflation. Inflation has slowed, but prices are not coming down. Seniors, tipped workers, and some who are paid overtime may enjoy an uptick in their refund, but it is not going to provide meaningful household budget relief.”
What Happens Next
While some of the new credits and deductions have led to significant increases, not every taxpayer will benefit when they file their return, Beene said.
“Some of the new breaks and credits don’t benefit every taxpayer, and those who have yet to file need to keep realistic expectations,” he said. “Ultimately, those who do receive the larger refunds will get a well-needed increase to help with their expenses.”
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2026-03-06T16:03:16Z
