The federal government signed the One Big Beautiful Bill into law on 04 July 2025, changing many tax provisions. The analysts predicted that the taxpayers can receive a higher tax refund in the next season due to the bill.
The OBBBA bill has expanded the TCJA 2017 Act, introduced a higher standard deduction, tax credits, and other provisions that will add to the higher refund in the tax season. Some of the changes are implemented from January 2025, whereas some will be implemented for the 2026 tax year.
The tax refund may vary depending on the taxpayer’s household income, eligibility for the credits, or deductions. You can get an idea of a higher tax refund and eligibility, and other details here.
How will Trump’s new bill offer a massive refund in the 2026 tax season?
The One Big Beautiful Bill has brought massive changes to the tax laws, and some of them will be enacted in the 2025 tax year, which can increase the tax refund for taxpayers. Here are the tax provisions or changes that can increase the refund in the 2026 tax season:
- Standard Deduction:
- The OBBBA bill increases the standard deduction for the 2025 tax year beyond the inflation adjustment announced earlier.
- Now, the taxpayers will have the following standard deduction for the 2025 tax year:
| Filing Status | Standard Deduction |
| Single or married filing separately | $15,750 |
| Married Filing Jointly or qualifying survivors | $31,500 |
| Head of Household | $23,625 |
- Additional Deduction for seniors:
- The bill announces the additional deduction for seniors of 65 or above age up to $6000 or $12,000 (for couples).
- The deduction will, however, phase out if the gross income of a senior is above the threshold $75,000 for individuals and $150,000 for joint filers.
- Child Tax Credit:
- The bill increases the child tax credit from $2000 to $2200 for taxpayers, which will lower your tax bill, whereas the additional child tax credit will be $1700.
- IRS withholding tables:
- The IRS has not changed the withholding tables for the 2025 tax year. Although the rates are the same, the new provisions are not updated on the table, such as no tax on qualified tips or overtime.
- With no update on the withholding table, taxpayers might have overpaid the withheld taxes, which can result in higher refunds on the 2026 tax season.
- Retroactive changes:
- The bill introduces retroactive changes, such as research & experiment expenditures, Form-1099-K threshold, and employee retention credit, that could increase the refunds for businesses.
Who will be eligible for the high refunds?
As per the OBBBA changes affecting the tax refunds, the following taxpayers can expect higher refunds in the 2026 tax season:
- Employees paying taxes based on the pre-OBBBA withheld tax rates could expect a higher refund, as the table is not updated yet.
- Taxpayers eligible for the standard deduction or seniors eligible for the additional senior deductions can receive the higher refunds.
- Taxpayers eligible for the refundable credits can be eligible for the higher refund.
- Small business owners or freelancers can expect some higher refunds thanks to retroactive changes.
The high-income earners or people who have adjusted the withheld taxes in mid-2025 after the bill was enacted may not see that much impact on their refund.
How much tax refund increase can you expect in the 2026 tax season?
Based on the different reports from the analysts and their evaluation, you can expect the 2026 season to go higher to the following extent:
- The Oxford Economic Report says that, due to the OBBBA bill, the taxpayers would have an additional $50 billion in tax savings. The additional tax savings would hike the tax refunds by 11% for the taxpayers from the 2024 tax year returns.
- Piper Sandler predicted $91 billion in tax relief for the 2026 tax season, where $59 billion will go to tax refunds, whereas the rest will lower taxes.
- Based on the OBBBA tax changes and $50 billion increase, the taxpayers can expect 15% to 20% increase in their average tax refund for the 2025 tax year, when the average tax refund for the 2024 tax year was $3,138.
What should you do now for the 2026 tax season?
With the speculation of higher tax refunds, taxpayers should keep the following things in mind to prepare and take advantage of the tax changes:
- You must keep the records of the qualified overtime or tips to claim a deduction while filing a tax return.
- You should check your withheld tax status and see if you have overpaid the taxes to get the tax refund.
- You can use the IRS tools or tax software to calculate your tax refunds based on the qualifying credits, deductions, and other tax changes.
- If you qualify for the tax credits, you must gather the documents to claim them and file the tax returns early.
The 2026 tax season can bring a high refund for taxpayers, thanks to the OBBBA bill tax changes. Taxpayers’ refund value depends on their income, income sources, credits or deductions they qualify for, so get aware of all the changes before filing for a tax return.
Disclaimer: 2026 refund predictions are for informational purposes only. Actual refunds depend on IRS rules and tax law changes.
