Apr 9, 2026
As millions of Americans file their taxes this season, some are seeing bigger refunds, while others are left wondering why theirs didn't budge.
The difference largely comes down to sweeping tax changes tied to President Donald Trump's "One, Big, Beautiful Bill," along with how those changes interact with individual income, deductions and eligibility rules.
Refunds are up, but not for everyone
According to the IRS, the average tax refund reached (1) $3,571 as of March 20, up from $3,221 a year earlier.
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That figure briefly climbed even higher earlier in the season — peaking (2) at $3,804 in February — before declining as more returns were processed.
The White House has touted (3) the changes as a major win for taxpayers, with officials suggesting some households could see refunds rise by $1,000 or more. But IRS data shows the gains are far from uniform.
In fact, some filers are seeing only modest increases, or none at all.
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Who is actually benefiting?
Certain taxpayers are seeing noticeably larger refunds, especially those able to claim newly introduced deductions.
During a March congressional hearing, officials said filers using the new tax breaks were already receiving refunds about $775 higher on average than last year, CNBC reports (4).
These changes include (5) deductions for overtime pay, tip income, auto loan interest and a new senior "bonus" deduction.
But these benefits come with limits, and not everyone qualifies.
The fine print behind the 'One Big, Beautiful Bill'
One reason refunds vary so widely is that many provisions don't work the way their names suggest.
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For example, a widely promoted "no tax on Social Security" measure doesn't actually change how Social Security benefits are taxed, according to the CNBC report.
Similarly, the "no tax on overtime" and "no tax on tips" provisions are deductions — not full exemptions — meaning they only reduce taxable income rather than eliminate taxes entirely.
Eligibility rules also narrow who benefits. For instance:
- The overtime deduction phases out for higher earners
- Some tipped workers are excluded based on industry
- The expanded child tax credit now requires at least one parent to have a Social Security number
These kinds of restrictions help explain why headline promises don't translate into equal gains for every taxpayer.
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Bigger deductions with uneven impact
The legislation also boosted several core tax provisions that can affect refund size.
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The standard deduction increased to $15,750 for single filers and $31,500 for married couples filing jointly for 2025 tax returns. Since over 90% of taxpayers claim the standard deduction, this change alone affects most filers, CNBC notes (6).
At the same time, the cap on state and local tax (SALT) deductions jumped to $40,000, up from $10,000.
That change could significantly boost refunds, but primarily for higher-income households who itemize deductions. Fewer than 10% of filers itemized in recent years, indicating many Americans wouldn't benefit. But this could increase based on the higher 2025 deduction limit, the report (7) states.
Why some refunds are unexpectedly larger
Another key factor has nothing to do with new tax breaks at all.
Despite multiple policy changes, the IRS didn't (8) update withholding tables for 2025, which determine how much tax is taken from paychecks throughout the year.
That means many workers likely overpaid taxes, which leads to larger refunds when filing.
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About 80% of U.S. filers report wages on Form W-2, CNBC notes (9), meaning withholding (10) plays a major role in their final refund or tax bill.
Check out your individual situation
The IRS expects (11) about 164 million individual returns to be filed by the April deadline, and the wide variation in refunds underscores just how complex the system has become.
New deductions, shifting eligibility rules and unchanged withholding mean some Americans are seeing meaningful gains, while others are left at or near status quo.
Remember, your personal refund ultimately depends on your individual situation. Two taxpayers with similar incomes can see very different outcomes.
That means, even with all the changes, it's important to understand the details, like income, family status, deductions and how much tax you already paid for the year.
Article Sources
We rely only on vetted sources and credible third-party reporting. For details, see our ethics and guidelines.
Internal Revenue Service (1)(2) ; The White House (3) ; CNBC (4)(5)(6)(7)(8)(9) ; Internal Revenue Service (10)(11)
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With a writing and editing career spanning over 13 years, Emma creates and refines content across a broad spectrum of industries, including personal finance, lifestyle, travel, health & wellness, real estate, beauty & fitness and B2B/SaaS/tech. Her versatility comes through contributions to high-profile clients like Moneywise, Healthline, Narcity and Bob Vila, producing content that informs and engages, along with helping book authors tell their stories.
