Bigger payouts ahead: The Trump tax reforms you need to know for 2026 refunds
TOI GLOBAL DESK | TOI GLOBAL | Dec 26, 2025, 19:41 IST
Donald Trump
Image credit : AP
In 2026, taxpayers across the United States are in for a pleasant surprise with significant tax refunds. The mid-year adjustments stemming from Donald Trump’s tax reforms will finally show their impact, leading to larger payouts for many. Workers in the service industry and those earning overtime pay could see the most substantial benefits.
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Americans may receive significantly larger tax refunds in 2026, with a senior White House economic adviser predicting the biggest refund cycle in the country's history. This increase is attributed to changes in Donald Trump's signature tax legislation, the 'One Big, Beautiful Bill Act' (OBBBA), which was enacted mid-year and thus not fully reflected in earlier tax filings.
Kevin Hassett, Director of the National Economic Council, stated that taxpayers should anticipate "massive refund checks" in 2026. He described the upcoming refund season as "the biggest refund cycle ever in the history of America."
Hassett explained that the OBBBA was passed on July 4, meaning many tax changes affecting the previous year were not incorporated into the tax forms filed earlier in the year. These adjustments are now expected to be reflected in the refund checks.
"We didn't pass the Big Beautiful Bill until the middle of the summer, and so a lot of the tax changes that affect last year weren't in any tax forms that people filled out at the beginning of the year," Hassett said. "So we are going to see the biggest refund cycle ever in the history of America, and people are going to get massive refund checks."
The new law introduced several tax breaks not previously available, and Hassett indicated that the benefits would not be distributed equally. He highlighted that workers who earn tips or receive overtime pay are expected to see some of the largest gains.
"For the typical person who's a tip worker or gets overtime pay, we're expecting just that part of it alone to be worth a couple thousand-dollar refund," he stated.
Other administration officials have also projected larger refunds. White House Press Secretary Karoline Leavitt mentioned during a December 11 briefing that Americans could expect an average refund of around $1,000 next year. Treasury Secretary Scott Bessent echoed this sentiment, suggesting refunds in 2026 could be "very large," potentially ranging from $1,000 to $2,000 per household.
Independent estimates suggest the impact could be even more substantial. Financial services firm Piper Sandler concluded that the average refund could increase by approximately $1,000 per taxpayer. This would bring the average refund to roughly $4,151 per filer, an increase from about $3,151 the previous year, according to figures cited from Kiplinger.
Don Schneider, the deputy head of US policy at Piper Sandler, elaborated on the projected increase.
"In a typical year, we might have about $270 billion in tax refunds, and it'll be that plus another $90 billion," Schneider said.
Hassett also addressed Donald Trump's proposal for a separate $2,000 tariff-related stimulus check. He noted that this initiative would depend on congressional action.
He added that he anticipates legislation related to that proposal to be drafted early next year.
The FAQs section of the article addresses common questions regarding the expected tax refund increases.
Why are tax refunds expected to be bigger in 2026?
Refunds may be larger because tax changes in Trump’s OBBBA were passed mid-year and were not reflected in earlier tax filings.
Is the $2,000 stimulus check guaranteed?
No. Hassett said the tariff-related stimulus check would depend on what happens in Congress.
The article emphasizes that the OBBBA's mid-year passage is a key reason for the anticipated larger refunds. This timing meant that many of the tax adjustments were not accounted for in the initial tax forms filed by individuals. Consequently, these retroactive changes are now expected to manifest as increased refund amounts.
The specific benefits for tip workers and those receiving overtime pay are highlighted as a significant component of the larger refunds. Hassett's projection of a "couple thousand-dollar refund" for these individuals underscores the targeted impact of the tax legislation.
The corroboration from other administration officials, including the White House Press Secretary and the Treasury Secretary, lends further weight to the expectation of substantial refund increases. Their estimates, ranging from $1,000 to $2,000 per household, provide a concrete range for what taxpayers might expect.
The independent analysis from Piper Sandler offers a more detailed financial projection, suggesting a significant jump in the average refund. The firm's estimate of an additional $1,000 per taxpayer, leading to an average of over $4,000, provides a data-driven perspective on the potential financial impact. The projected increase in the total amount of tax refunds, an additional $90 billion on top of the typical $270 billion, illustrates the scale of the expected refund cycle.
The article also clarifies the status of the proposed $2,000 tariff stimulus check. Hassett's statement that its realization is contingent on congressional approval is a crucial piece of information for those anticipating this additional financial support. The expectation of legislative drafting early next year indicates that this proposal is still under consideration.
The structure of the article, moving from the broad prediction of a historic refund cycle to specific details about who will benefit and the estimated amounts, provides a comprehensive overview of the situation. The inclusion of direct quotations from key figures like Kevin Hassett, Karoline Leavitt, Scott Bessent, and Don Schneider adds authenticity and direct insight into the administration's and financial experts' perspectives. The FAQ section serves to quickly address potential reader queries, reinforcing the main points of the article. The overall tone remains neutral, focusing on presenting the information and predictions as reported.
Kevin Hassett, Director of the National Economic Council, stated that taxpayers should anticipate "massive refund checks" in 2026. He described the upcoming refund season as "the biggest refund cycle ever in the history of America."
Hassett explained that the OBBBA was passed on July 4, meaning many tax changes affecting the previous year were not incorporated into the tax forms filed earlier in the year. These adjustments are now expected to be reflected in the refund checks.
"We didn't pass the Big Beautiful Bill until the middle of the summer, and so a lot of the tax changes that affect last year weren't in any tax forms that people filled out at the beginning of the year," Hassett said. "So we are going to see the biggest refund cycle ever in the history of America, and people are going to get massive refund checks."
The new law introduced several tax breaks not previously available, and Hassett indicated that the benefits would not be distributed equally. He highlighted that workers who earn tips or receive overtime pay are expected to see some of the largest gains.
"For the typical person who's a tip worker or gets overtime pay, we're expecting just that part of it alone to be worth a couple thousand-dollar refund," he stated.
Other administration officials have also projected larger refunds. White House Press Secretary Karoline Leavitt mentioned during a December 11 briefing that Americans could expect an average refund of around $1,000 next year. Treasury Secretary Scott Bessent echoed this sentiment, suggesting refunds in 2026 could be "very large," potentially ranging from $1,000 to $2,000 per household.
Independent estimates suggest the impact could be even more substantial. Financial services firm Piper Sandler concluded that the average refund could increase by approximately $1,000 per taxpayer. This would bring the average refund to roughly $4,151 per filer, an increase from about $3,151 the previous year, according to figures cited from Kiplinger.
Don Schneider, the deputy head of US policy at Piper Sandler, elaborated on the projected increase.
"In a typical year, we might have about $270 billion in tax refunds, and it'll be that plus another $90 billion," Schneider said.
Hassett also addressed Donald Trump's proposal for a separate $2,000 tariff-related stimulus check. He noted that this initiative would depend on congressional action.
He added that he anticipates legislation related to that proposal to be drafted early next year.
The FAQs section of the article addresses common questions regarding the expected tax refund increases.
Why are tax refunds expected to be bigger in 2026?
Refunds may be larger because tax changes in Trump’s OBBBA were passed mid-year and were not reflected in earlier tax filings.
Is the $2,000 stimulus check guaranteed?
No. Hassett said the tariff-related stimulus check would depend on what happens in Congress.
The article emphasizes that the OBBBA's mid-year passage is a key reason for the anticipated larger refunds. This timing meant that many of the tax adjustments were not accounted for in the initial tax forms filed by individuals. Consequently, these retroactive changes are now expected to manifest as increased refund amounts.
The specific benefits for tip workers and those receiving overtime pay are highlighted as a significant component of the larger refunds. Hassett's projection of a "couple thousand-dollar refund" for these individuals underscores the targeted impact of the tax legislation.
The corroboration from other administration officials, including the White House Press Secretary and the Treasury Secretary, lends further weight to the expectation of substantial refund increases. Their estimates, ranging from $1,000 to $2,000 per household, provide a concrete range for what taxpayers might expect.
The independent analysis from Piper Sandler offers a more detailed financial projection, suggesting a significant jump in the average refund. The firm's estimate of an additional $1,000 per taxpayer, leading to an average of over $4,000, provides a data-driven perspective on the potential financial impact. The projected increase in the total amount of tax refunds, an additional $90 billion on top of the typical $270 billion, illustrates the scale of the expected refund cycle.
The article also clarifies the status of the proposed $2,000 tariff stimulus check. Hassett's statement that its realization is contingent on congressional approval is a crucial piece of information for those anticipating this additional financial support. The expectation of legislative drafting early next year indicates that this proposal is still under consideration.
The structure of the article, moving from the broad prediction of a historic refund cycle to specific details about who will benefit and the estimated amounts, provides a comprehensive overview of the situation. The inclusion of direct quotations from key figures like Kevin Hassett, Karoline Leavitt, Scott Bessent, and Don Schneider adds authenticity and direct insight into the administration's and financial experts' perspectives. The FAQ section serves to quickly address potential reader queries, reinforcing the main points of the article. The overall tone remains neutral, focusing on presenting the information and predictions as reported.