Americans get bad news about $1,000 tax refund increase

Americans are set to receive some bad news regarding the average $1,000 tax refund increase expected for the 2025 tax year.

Because President Donald Trump’s tariffs cost Americans an average of $1,000 per household last year, the extra $1,000 in refunds could make a minute difference.

Moving into 2026, the tariffs are likely to cost an average of $1,300 per household.

Why It Matters

The One Big Beautiful Bill Act ushered in a wave of tax changes that significantly update what Americans owe and potentially how large their tax refund is.

Tax refunds are set to increase an average of $1,000 per household because of President Donald Trump’s Working Families Tax Cuts, the Treasury Department said. However, the impact could be narrow in scope.

A sign outside the Internal Revenue Service on June 7, 2025, in Washington, D.C.

–

What To Know

Trump’s economic policies could be costing Americans more in the long run, even as his new tax rules lead to larger refunds on average.

According to the Tax Foundation, the federal government collected $264 billion in total tariff revenues in 2025, much less than the trillions the White House has touted.

Most of the benefits in tax cuts may be limited in impact as Trump’s tariffs already cost most American consumers the amount of money they’re getting back.

“America’s average tariff rate has increased by nearly tenfold in the past year—while inflation has actually cooled, real wages have risen, GDP growth has accelerated, and trillions in investments continue pouring in to make and hire in America,” White House spokesperson Kush Desai said in a statement to ABC News.

The tariff’s impacts have been widespread, with coffee price up by 33.6 percent, ground beef up by 19.3 percent and even lettuce surging by 16.8 percent, according to the Bureau of Labor Statistics.

“When other countries get hit with our tariffs, they don’t just shrug and accept it,” Michael Ryan, a finance expert and the founder of MichaelRyanMoney.com, told Newsweek. “They retaliate. That’s when American farmers and export companies get crushed because suddenly nobody’s buying our stuff overseas anymore.”

Who Will Get the Biggest Tax Refund Increase?

Middle‑ and upper‑middle‑income earners who make between $60,000 and $400,000 will likely receive the biggest refund boosts because of the retroactive provisions of the One Big Beautiful Bill Act. These households benefit most from expanded deductions and the State and Local Tax (SALT) cap increase.

The SALT cap was raised from $10,000 to $40,000, especially helping residents in high‑tax states.

Homeowners in states with high property or income taxes—such as New York, New Jersey, California and Connecticut—will likely see major gains because the SALT deduction cap was raised dramatically.

Seniors as well as tipped and overtime workers could benefit substantially under the new rules going into effect for tax year 2025.

How To Check IRS Tax Refund Status

You can easily check your tax refund status by using the IRS Where’s My Refund tool.

This tool is available on the IRS website and updates every day. As long as a user has their Social Security number, filing status and refund amount, they should be able to see one of three statuses: return received, refund approved and refund sent.

If approved, they should also see an expected mailing date.

What People Are Saying

Michael Ryan, a finance expert and the founder of MichaelRyanMoney.com, told Newsweek: “You’re feeling it now with prices climbing everywhere. By 2026, 2027, supply chains are going to start imploding for real. Companies laying people off because manufacturing costs are too high, retaliatory tariffs gutting agricultural jobs, export-dependent regions getting devastated.”

Alex Beene, a financial literacy instructor for the University of Tennessee at Martin, told Newsweek: “While many Americans will see larger tax refunds this year, those refunds come at a time when inflationary pressures continue to weigh on the budgets of many households. With tariffs adding an estimated $1,000 to the yearly costs Americans face, many households are relying on bigger refunds to cover the gap in income needed to cover these rising costs.”

Kevin Thompson, the CEO of 9i Capital Group and the host of the 9Innings podcast, told Newsweek: “No matter how you slice it, tariffs raise the cost of the end product. While a company like Costco may absorb some of the increase, most businesses pass those costs directly to consumers. That is the reality of modern capitalism, companies have a fiduciary duty to shareholders, not the shopper, so tariffs often operate more like a consumption tax paid at the register.”

What Happens Next

Taxes are due April 15.

Ryan said that on paper, Americans would get a higher tax refund than in previous years, but it’s already been swallowed by Trump’s economic policies.

“You’re paying around $1,300 this year for a policy that makes everything more expensive, crushes the domestic manufacturers it supposedly helps, destroys American exports through retaliation, and fundamentally breaks how presidential power’s supposed to work,” Ryan said. “The tax refund you got? It’s being swallowed before you even notice.”

–

Source: Americans get bad news about $1,000 tax refund increase