The 2026 tax season started in late January, and thanks to the Working Families Tax Cuts, Americans are seeing noticeably bigger relief than last year. The biggest tax benefits include no taxes on tips, no taxes on overtime, an increased child tax credit, an increased standard deduction, and increased deductions for seniors.
While the tax cuts were passed in July 2025, Americans are now receiving the benefits this tax season. Across the board, the average tax refund amount is 11.1% higher than in 2025. That translates to an average of $350 more tax dollars in 2026 that go back into the pockets of Americans because of good tax policy.
In 2025, the average refund amount was $3,170; in 2026, the average is $3,521. Part of this is due to a higher standard deduction enacted in the Working Families Tax Cuts. More than 90% of taxpayers claim the standard deduction rather than itemizing their deductions. This year, the standard deduction was made permanently higher at $15,750 for single taxpayers, $23,625 for head of household taxpayers, and $31,500 for those married filing jointly. Changes to the standard deduction were retroactive to the last tax year, but tax withholding was not adjusted for paycheck earners, so they are getting bigger refunds as a result.
Another reason for the higher average refund is an increased Child Tax Credit (CTC). While the CTC was increased to $3,000 in 2021 due to the pandemic, that was a temporary boost. The Working Families Tax Cuts permanently increased the maximum child tax credit to $2,200, resulting in a $200-per-child boost for 60 million American families.
One additional tax change making a significant impact on taxpayers is the State and Local Tax Deduction (SALT) deduction. This allows taxpayers who itemize their credits/deductions to claim a deduction for certain state and local taxes paid. Taxpayers from blue states with high taxes benefit the most from this, and those states have the highest percentage of SALT claims as well. Historically, the SALT deduction had not been limited until a $10,000 limit was implemented by the 2017 Tax Cuts and Jobs Act to pay for tax cuts for residents of all states. Implementing the SALT deduction limit reduced the number of taxpayers claiming the SALT deduction from 31% in 2017 to just 9% in 2022. The Working Families Tax Cuts increased the limit to $40,000, providing Blue-state taxpayers with some additional relief.
Bottom Line
Despite the cost of living rising, gas prices increasing, and many Americans recognizing that many lifestyles are unaffordable, the Trump administration took measurable steps to get more money back to taxpayers.
Americans are receiving an average of $350 more from tax refunds than last year, and we expect savings to continue as more Americans are able to take advantage of common-sense tax policy.