The Trump administration is making headlines with promises of some of the largest tax refunds in U.S. history. Treasury Secretary Scott Bessent announced that most American workers could see “very large refunds” during the 2026 tax season.
This is all thanks to a new law—called the “One Big Beautiful Bill Act” (OBBBA)—that is expected to return between $100 billion and $150 billion to households across the country.
Why Are These Refunds Happening?
There are a couple of reasons why refunds will be bigger than usual in 2026:
- The new law includes changes that apply to 2025 earnings, not just future ones. This means some new tax breaks will count retroactively.
- One major change is that tips and overtime pay will not be taxed at all.
- Because the law was passed in July 2025, most people didn’t get a chance to adjust how much tax was taken out of their paychecks. As a result, many workers paid more than they needed to, so they’ll get that extra money back as a larger refund.
How Much Will People Get?
According to government estimates, the average household could receive an extra $1,000 to $2,000 in their 2026 tax refund.
Other Tax Benefits
The new law offers even more benefits, such as:
- Bigger deductions: Workers can deduct up to $25,000 from their taxable income for tips and overtime.
- Increased deductions for car loan interest: You can deduct up to $10,000 in interest for loans on certain U.S.-made cars.
- Higher standard deductions: For married couples who file taxes together, the standard deduction will go up to $32,200 in 2026.
What Does This Mean for You?
In summary, these tax law changes could mean a larger refund and more money in your pocket when you file your taxes in 2026, especially if you earn a lot from tips or overtime, or if you qualify for the special deductions.
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