2026 Tax Refunds May Be Bigger Than Expected, but One Group Will Benefit The Most

In 2026, Americans are on track to get big tax refunds. This is good news for many, as this lump sum payment that comes in once per year is often a great opportunity to save more or pay down debt.

However, the tax refunds won't be distributed evenly. While many taxpayers are likely to see a lot more money coming back from the IRS, one particular group is likely to benefit more than others.

Here are the details about the big tax refunds that are coming, along with who will get a larger share of the funds the treasury is returning.

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Here's why tax refunds will be bigger next year

Tax refunds are likely going to be supersized in 2026 because of the One Big Beautiful Bill Act, which made major reforms to the tax code, including adding more opportunities to reduce your taxable income by claiming deductions. The act put these reforms into place retroactively for 2025, which means that the tax savings is taking effect this year.

When you file your tax return in 2026, you will be submitting information on the income you earned and the tax deductions you were eligible for in 2025. So, you'll be able to benefit from this tax saving for the first time. However, you'll have already paid your taxes for 2025 since the U.S. is a pay-as-you-go system, so you'll have paid in extra money since the tax cuts weren't accounted for.

See, the amount that your employer takes out of your paycheck is based on IRS withholding schedules. The IRS made the decision not to adjust the withholding schedules despite the fact that the tax cuts mean that most people will ultimately owe less in taxes. The result is that your employer took more money out of your checks based on the old rules, even though the new rules mean that your federal income tax is likely going down.

When you report your adjusted gross income to the IRS, claim your deductions, and get your refund in 2026, you'll get this money back. One analysis published on LinkedIn by David Kelly, chief global strategist at J.P. Morgan Asset Management, estimated that an average refund of $3,743 could be paid out to 110 million taxpayers if 2/3 of the retroactive tax breaks in the One Big Beautiful Bill Act are paid out in the form of refunds.

Some taxpayers will benefit more than others from tax reforms

While many Americans will get big tax refunds in 2026, some taxpayers are likely to benefit significantly more than others. Specifically, higher earners are more likely to reap the most savings. That's because most of the tax savings come in the form of tax deductions, not tax credits.

Since tax reductions reduce taxable income, you don't pay taxes on the amount you deduct. The higher your tax rate is, the more you benefit from not having to pay taxes on some of your income. For example, if you get a $6,000 tax credit and you're in the 10% tax bracket, then the most you'd save is 10% of that $6,000, or $600. But if you are in the 24% tax bracket, you'd save $1,440 -- more than double.

Because of this effect, Kelly points out that the tax breaks in the One Big Beautiful Bill will be worth much more to families with income topping $130,000 than to lower earners.

Still, most taxpayers can expect bigger refunds, and this influx of money could have a stimulus-check-like impact on the economy, according to Kelly -- which could be a good thing for those with more to spend, but which could help to keep inflation high.

Ultimately, if you get a bigger refund, you should aim to use the funds wisely -- ideally to improve your financial situation over the long run, especially if the large surge of refund checks does have an inflationary impact that drives prices up further.

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