Last updated: September 2026. Techeconomix Editorial Team — researched using primary reporting and data from the Internal Revenue Service, the Tax Foundation, and the Bipartisan Policy Center. See “Sources & Methodology” at the end of this article.
Quick answer: The average federal tax refund for the 2026 filing season was $3,571 through late March, up roughly 10–11% compared to the same point in 2025 — the first filing season to reflect new deductions from the 2025 One, Big, Beautiful Bill Act (OBBBA). The IRS processed the season smoothly overall despite workforce reductions and leadership turnover, though more than a million taxpayers experienced refund delays averaging about 5.5 weeks. Here’s what actually changed, and what it means heading into the 2027 filing season.
Why Refunds Jumped This Year
The 2026 filing season, covering 2025 tax returns, was the first to reflect several retroactive tax provisions from the One, Big, Beautiful Bill Act, which President Trump signed into law on July 4, 2025. Even though it was signed partway through 2025, many of its provisions applied retroactively to income earned starting January 1, 2025 — meaning the tax cuts showed up as bigger refunds when people filed in early 2026, rather than as smaller paycheck withholding throughout the year, according to the Bipartisan Policy Center’s filing season brief.
Photo by Tima Miroshnichenko via Pexels
What Changed Under OBBBA
Taxpayers filing 2025 returns in 2026 could claim several new deductions for the first time, using a new Schedule 1-A, according to IRS guidance:
- No tax on tips: A new deduction for reported tip income.
- No tax on overtime: A new deduction for overtime pay.
- Auto loan interest deduction: A new deduction for interest paid on qualifying vehicle loans.
- Enhanced senior deduction: Americans 65 and older can claim an additional $6,000 deduction.
- Higher standard deduction: A roughly 5% boost to the standard deduction, which about 90% of taxpayers use instead of itemizing.
- Expanded SALT cap: A higher cap on state and local tax deductions for itemizers than the $10,000 limit that applied from 2018 to 2024.
The Numbers, By the Data
Tax Foundation’s tracking of IRS filing statistics shows the refund increase held up throughout the season: the average refund was $3,676 as of March 6, up 10.6% year-over-year, and $3,462 as of April 3, up 11.1% compared to the same point in 2025. The IRS’s own late-March update put the average refund at $3,571, with more than 80% of refunds issued in under 21 days and over 98% delivered electronically via direct deposit, out of 57 million refunds issued by that point. The agency expected to process about 164 million individual returns for the full season.
Not Everyone Had a Smooth Filing Season
The National Taxpayer Advocate’s mid-year report to Congress paints a more mixed picture than the IRS’s own upbeat messaging. More than 14 million individual returns were suspended during processing for additional review this season. Over one million taxpayers didn’t receive their refunds within the IRS’s normal processing window, experiencing an average wait of about 5.5 weeks — and an unknown but likely larger number experienced shorter delays that still fell within normal processing times. Taxpayers also reported more difficulty reaching the IRS by phone in 2026 than in 2025, according to the Advocate’s findings.
Context matters here: the National Taxpayer Advocate, Erin Collins, wrote that entering the season there was “considerable uncertainty” about whether the IRS could manage simultaneous major challenges — implementing sweeping new tax legislation, absorbing significant workforce reductions, and navigating extensive leadership turnover. Her assessment was that the agency “performed better than expected in most respects” despite those headwinds.
A Notable Operational Shift: Paper Checks Are Being Phased Out
In response to Executive Order 14247, “Modernizing Payments To and From America’s Bank Account,” the IRS began phasing out paper refund checks starting September 30, 2025. That means most taxpayers must now provide routing and account numbers to receive refunds by direct deposit. Taxpayers who filed without valid banking information received a CP53E notice — about 1% of filers, according to the IRS, though the agency notes taxpayers don’t need to wait for that notice to act and can update their information proactively through IRS.gov.
What to Expect for the 2027 Filing Season
With the retroactive OBBBA provisions now baked into 2026 withholding tables for a full year, some analysts expect the refund-size effect to moderate somewhat in 2027, since the “catch-up” nature of 2026’s larger refunds was partly a one-time effect of new deductions not yet reflected in prior paycheck withholding. If you had an unusually large refund or owed an unusually large amount for 2025, that’s generally a signal your withholding needs adjustment heading into the next tax year, according to guidance summarized by Omnitax Help.
Frequently Asked Questions
Why was the average tax refund higher in 2026?
The 2026 filing season was the first to reflect retroactive tax provisions from the 2025 One, Big, Beautiful Bill Act, including new deductions for tips, overtime, auto loan interest, and a higher standard deduction.
What was the average tax refund in 2026?
The average refund was approximately $3,571 as of late March 2026, up roughly 10-11% compared to the same point in the 2025 filing season, according to IRS and Tax Foundation data.
Are paper tax refund checks still available?
The IRS began phasing out paper refund checks on September 30, 2025, under an executive order on modernizing federal payments. Most taxpayers must now provide bank account information to receive refunds by direct deposit.
How long did 2026 tax refunds take to process?
Over 80% of refunds were issued in under 21 days, though more than one million taxpayers experienced delays averaging about 5.5 weeks, according to the National Taxpayer Advocate’s mid-year report.
Sources & Methodology
This article draws on primary data and reporting from: the Internal Revenue Service’s official 2026 filing season announcements and progress updates; the National Taxpayer Advocate’s 2026 mid-year report to Congress; the Tax Foundation’s tracking of IRS filing season data points; and the Bipartisan Policy Center’s issue brief on the 2026 tax filing season. Figures reflect the most recently published data as of this article’s last-updated date.
This article is for informational purposes and does not constitute tax advice. Consult a qualified tax professional for guidance specific to your situation.
