The year 2026 is expected to bring significant financial relief to millions of Americans, thanks to substantial tax refunds. According to a recent report, Americans are likely to receive refunds of $1,000 to $2,000 in 2026, with some cases potentially seeing even larger amounts.
The report comes from the renowned American magazine Newsweek, which reported that this refund is a result of President Donald Trump’s new tax policies. The effects of these policies have been in place since 2025, but the benefits will be realized with the 2026 tax filings.
Tax refunds are the biggest one-time payment of the year for millions of Americans. This news is especially important for those struggling with rising inflation, rent, medical expenses, and daily necessities.
What is the new tax law?
In 2025, the United States President Donald Trump passed a law called the One Big Beautiful Bill Act. It was approved in July 2025, but its implementation was backdated to January 1, 2025.
The sole purpose of this law was to provide tax relief to working Americans. It specifically addressed those who work overtime, earn tips, and belong to middle-class families.
Because the law was implemented in the middle of the year, many people did not adjust their tax withholdings.
Why will the tax refund be so high?
Every month, taxes are deducted from employees’ salaries based on estimated income. However, because the OBBBA was implemented midway through the year, most people’s tax deductions continued to be calculated according to the old rules.
Because the money was deducted according to the old rules, people have paid more tax than required, and now that excess amount will be refunded to them. Basically, it is one of the reasons why this year’s refund is going to be higher than last year’s.
What are the government and the IRS saying?
The U.S. Treasury Secretary and the acting Internal Revenue Service Commissioner have indicated that the refunds to be issued in the first quarter of 2026 could be substantial.
According to their estimates, most families could receive refunds between $1,000 and $2,000, with the total amount of refunds expected to be between $100 million and $150 million.
How much will ordinary people benefit?
According to Piper Sandler, a well-known research firm, the average tax refund for 2025 (tax year 2024) was $3,100, but this amount could increase to $4,100 in 2026 (tax year 2025), representing a $1,000 increase compared to the previous year.
The biggest refunds are most likely to benefit middle-income families, employees who work overtime, and those working for tips in the hotel, restaurant, and service sectors. Low-income families are unlikely to receive much benefit from this.
What are the criticisms and concerns?
While the government is touting this refund as a major achievement, several experts and organizations are criticizing it. According to the Congressional Budget Office, the top 10% of wealthy individuals will benefit the most in the long run, while the bottom 10% may experience annual losses.
Some critics say this law could increase America’s debt, and in some situations, it could lead to cuts in social programs such as Medicaid and food assistance.
Tax filing process and timeline
The IRS has not yet disclosed the start date for the 2026 tax season, but it is expected to be in the third week of January 2026. Please note that refunds will only be issued via direct deposit this year; the option for paper checks was eliminated after September 30, 2025, following Trump’s executive order.
The timeline for receiving a refund is the same as last year, meaning that it will take a maximum of 3 weeks to receive the refund if you file electronically. Those who e-file in the initial stages usually receive it in as little as 10 days.
Those who are eligible for refundable tax credits, such as the EITC or ACTC, will have to wait a little longer for their refunds. It is because there is a law, the PATH Act, which prevents the IRS from processing any refunds before February 15 if any tax credits have been claimed.
Disclaimer: Information about new U.S. tax law is for general awareness only. Official rules, dates, and eligibility are determined by Congress and the IRS.
