US workers may see bigger tax refunds in 2026

Working American households may receive significantly larger tax refunds early next year, following changes introduced under a newly enacted US tax law, Treasury Secretary Scott Bessent said.

Speaking Wednesday, Bessent said the adjustments could result in refunds ranging from about $1,000 to $2,000 per household, with payments expected during the first quarter of 2026. He estimated that total refunds nationwide could reach between $100 billion and $150 billion.

The anticipated payouts stem from provisions in the government’s latest budget and tax package, which includes expanded deductions and exemptions, such as deductions related to vehicle expenses and tax relief on tipped income.

Bessent explained that many workers have not yet updated their tax withholding, meaning more money has been taken out of paychecks than required. As a result, the excess would be returned when taxes are filed next year.

Once refunds are issued, workers are expected to adjust their withholding, leading to higher take-home pay in subsequent pay periods, according to the Treasury chief.

Other administration officials have echoed similar projections, with estimates suggesting average refunds could exceed $1,600.

The tax package, passed earlier this year, has drawn criticism from opponents who argue it disproportionately benefits higher-income earners and reduces funding for social programs, including Medicaid and food assistance.