Many Happy Returns: Tax Refunds Surge Thanks to New Deductions

With the 2026 tax season winding down toward the April 15th deadline, the returns so far show a boon for American taxpayers. The average refund is up 10.9% this year compared to last, according to IRS filing data. That figure is as of late March, with the IRS processing less than half of the 164 million returns expected to be filed by the deadline. The White House is touting these numbers as a direct result of last year's Working Families Tax Cuts law a.k.a. "The One Big Beautiful Bill." (OBBB)

Financial planner Richard Rosso credits provisions in the OBBB like no tax on tips and no tax on overtime, but is also seeing larger returns thanks to new deductions for seniors. "We're talking about seniors that have very modest expectations in savings, and they're shocked that they're getting back 15-hundred dollars or two-thousand dollars," says Rosso. "So I think those deductions have made a big impact."

The Trump administration has been predicting a tax windfall this year ever since the OBBB was passed last summer, while also reminding Americans that Democrats opposed the bill and every one of the tax provisions in it. Financial experts also saw this coming, albeit with a more cautious approach. "We talked about this earlier in the year, that we should expect higher tax refunds," says Rosso. "And I think that this is a positive, but unfortunately the news about gas prices is just easier clickbait than tax refunds."

Rosso believes these refunds bode well for spending and economic activity in the months ahead, but in the short-term they will continue to be overshadowed by higher oil and gas prices. "It's a positive right now during a time when people are feeling a bit more financially distressed until the Iran conflict is over," he tells KTRH. "It does portend well that with these refunds, people are going to spend so retail sales will remain strong."

"So the quicker this (Iran conflict) is over and gas prices retreat, knowing there are still more refunds to come, the overall outlook could really change for the better."