As Tax Day arrives, the average federal tax refund in 2026 is $3,462 — an 11% increase, roughly $350 more than in 2025, according to IRS data. Experts say much of the rise stems from new provisions in last year’s One Big Beautiful Bill Act that let millions of filers claim deductions that reduce taxable income and the amount owed to the IRS.
Andrew Lautz, director of tax policy at the Bipartisan Policy Center, said aggregate and per-person refunds are higher because “millions, if not tens of millions, of taxpayers are claiming one of the new deductions.” The think tank has observed many taxpayers taking advantage of changes that effectively remove federal income tax on tips and overtime. In a March survey of 1,200 taxpayers, roughly one-third said they received tipped income, overtime pay, or both.
By comparison, last year the IRS reported 104 million taxpayers — about 63% of filers — received refunds. So far in 2026, nearly 70 million filers have gotten refunds; distributions continue after Tax Day, and Lautz expects the average refund amount to remain fairly steady.
Investment bank Piper Sandler previously suggested refunds could rise by as much as $1,000 in 2026, a figure its deputy head of U.S. policy, Don Schneider, called a “hypothetical maximum” that assumes every filer receives a refund. He also noted that the estimated $106 billion in retroactive tax relief from the One Big Beautiful Bill Act will show up not only as refunds but also as lower tax bills going forward. “If we focus only on refund checks or average size, we miss half the story,” Schneider said, urging attention to reductions in taxes people otherwise would owe.
On how people plan to use larger refunds: a Bipartisan Policy Center survey from March 24 found 14% of taxpayers reported receiving a “significantly” larger refund this year. A Bank of America Global Research survey indicates more than one-third of Americans intend to use their IRS refund to pay down debt, while about 13% plan to save it.
Some households are likely to apply refunds toward everyday costs. Gas prices rose as global oil prices climbed amid the conflict involving Iran; as of the latest AAA data the national average for a gallon of regular gas was $4.12. Economists at the Stanford Institute for Economic Policy Research estimate the average U.S. household will spend roughly an extra $740 on gas this year because of higher oil prices — about double the average increase in refund size so far in 2026.
Edited by Alain Sherter