Home / Business and Economy / Millions See Larger Tax Refunds in 2026, But Unevenly
Millions See Larger Tax Refunds in 2026, But Unevenly
9 Feb
Summary
- Tax refunds are set to jump by $65 billion in 2026, one of the largest increases on record.
- Middle and higher-income households capture the largest dollar gains from tax law changes.
- IRS faces increased workload with over 25% fewer staff for the 2026 filing season.
The 2026 tax season is poised to deliver one of the largest refund waves on record, with an estimated $65 billion increase over the previous year. These enhanced refunds are a direct result of sweeping tax law changes enacted to make earlier tax cuts permanent and introduce new deductions.
These legislative adjustments include higher standard deductions, an expanded Child Tax Credit, and a raised cap on State and Local Tax (SALT) deductions. While these measures aim to inject cash into household balance sheets, their benefits are unevenly distributed.
Middle- and higher-income households are projected to receive the largest dollar gains. Data indicates a significant rise in spending among these groups compared to lower-income households. The expansion of SALT deductions, in particular, disproportionately benefits wealthier taxpayers in higher-tax states.
