Certain filers could see bigger tax refunds next year, thanks to retroactive changes enacted via President Donald Trump’s “big beautiful bill,” according to analyst projections.
The July legislation added several tax breaks that apply to 2025 — including a larger standard deduction, “bonus” deduction for older adults and tax break on tips, among others. Those could affect returns filed in 2026.
However, many workers are still having the same tax withheld from their paychecks as before Trump’s law because the IRS hasn’t updated the 2025 tax tables that tell companies how much to take out.
“As a result, many taxpayers will pay too much in tax this year and see larger tax refunds or smaller tax bills next year,” Nancy Vanden Houten, lead economist at Oxford Economics, wrote in an October report.
A separate note released Friday from investment bank Piper Sandler projected “a record tax refund season in 2026,” with middle and upper-income households likely to benefit the most. An estimated $91 billion of tax relief could arrive between February and April 2026, with $59 billion paid via refunds and $32 billion from lower taxes owed, according to the note.
