Americans in line for ‘gigantic’ tax refund early next year, says Scott Bessent
Refund checks for Americans are expected to be “gigantic” during the upcoming tax filing season, driven by tax cuts included in President Trump’s One Big Beautiful Bill Act, according to Treasury Secretary Scott Bessent.
Speaking this week on the All-In Podcast, Bessent explained that tax provisions in the legislation signed by President Trump in July were made retroactive to the beginning of the year. However, most workers did not adjust the amount withheld from their paychecks after the law took effect. As a result, many Americans are likely to receive significantly larger refunds when they file their taxes in 2026.
“I can see that we’re going to have a gigantic refund year in the first quarter because working Americans did not change their withholdings,” said Bessent, who is also serving as acting commissioner of the Internal Revenue Service.
Bessent estimated that households could receive refunds ranging from $1,000 to $2,000, depending on the number of workers in the household.
His prediction aligns with estimates from tax experts. The nonpartisan Tax Foundation projects that for tax year 2025, the average refund will reach $3,800, up from $3,004 in 2023 and $3,052 last year.
“When taxpayers file their 2025 tax returns in 2026, many will see larger refunds than in recent years,” said Erica York of the Tax Foundation. “That’s due to the One Big Beautiful Bill Act, which reduced individual income taxes for 2025 by an estimated $144 billion.”
York explained that because the IRS did not update withholding tables after the law was enacted, workers continued to have more taxes withheld from their paychecks than required under the new law. Instead of receiving the benefit gradually through higher take-home pay, taxpayers will receive the savings as a lump sum refund.
Bessent added that he expects workers to update their withholding next year, which, combined with large refund checks, could significantly boost consumer spending.
“They will change their withholding schedule at the beginning of the year and they will get an automatic increase in real wages,” he said. “I think that’s going to be a very powerful combo.”
President Trump’s One Big Beautiful Bill Act included multiple provisions aimed at reducing individual income tax burdens, such as increasing the child tax credit and standard deduction, raising the cap on the state and local tax (SALT) deduction, and introducing deductions for auto loan interest, overtime pay, and tip income.
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