U.S. News
Why Trump Says Next Year’s Tax Refunds Will Be the Biggest Ever
By Jake Beardslee · December 19, 2025
President Donald Trump is promising significantly larger tax refunds for Americans in 2026, pointing to retroactive tax changes included in legislation enacted earlier this year that will affect 2025 tax returns.
The law, which Trump has repeatedly referred to as his “big beautiful bill,” was signed in July and made several changes to individual income taxes. Because those provisions apply retroactively to the 2025 tax year, their effects will be felt when taxpayers file returns in 2026.
“Next spring is projected to be the largest tax refund season of all time,” Trump said Wednesday in a prime-time address from the White House.
The president delivered the remarks from the Diplomatic Reception Room as concerns about inflation and the cost of living remain high for many Americans. According to the CNBC All-America Economic Survey, which polled 1,000 U.S. adults in early December, 66% of respondents disapproved of Trump’s handling of inflation and the cost of living, up from 62% in October.
While Trump has framed the legislation as a broad financial benefit for households, experts note that refund amounts will vary widely depending on how much tax individuals paid during 2025 and which provisions apply to their circumstances. Generally, taxpayers receive a refund when they overpay federal income taxes through payroll withholding or estimated payments, while those who underpay may owe money at filing time.
Analysts say many taxpayers are likely to see larger refunds because the Internal Revenue Service did not update withholding tables after the law was enacted. When filing 2025 tax returns in 2026, “many will see larger refunds than in recent years,” Erica York, vice president of federal tax policy with the Tax Foundation’s Center for Federal Tax Policy, wrote in an analysis on Wednesday.
The legislation increased the standard deduction, expanded the maximum child tax credit, raised the cap on the state and local tax deduction, created a $6,000 tax break for seniors, and introduced deductions for auto loan interest, tip income and overtime pay. According to Tax Foundation estimates, the seven provisions reduced individual income taxes by $144 billion in 2025.
Because withholding tables were left unchanged, workers did not receive the tax benefits gradually through higher take-home pay. “Instead of gradually receiving the benefit of the tax cuts through higher take-home pay during the year, most taxpayers will receive it all at once when they file their returns,” York wrote.
The extent of any refund increase will depend on which provisions apply to a filer’s situation. The higher standard deduction, expanded child tax credit and senior tax break are expected to affect a broad swath of taxpayers, while deductions for tip income and overtime pay apply to more limited groups.
A research note released by Piper Sandler on Oct. 31 predicted “an exceptionally large refund season,” with middle- and upper-income taxpayers likely to benefit the most. As of Oct. 17, the average refund during the 2025 filing season was $3,052, slightly higher than the $3,004 average recorded in 2024, according to IRS data.