Trump-Era Tax Changes Push Average Refunds Significantly Higher in 2026 Filing Season

The Internal Revenue Service reported higher tax refund checks for millions of Americans this filing season. Early data show a rise in average refunds compared to last year, providing financial respite to many households as spring approaches.

In the week ending February 20, the average federal tax refund was $3,804. The weekly refund average was $351 lower a year ago. Refunds rose 10.2%, one of the largest early-season rises in recent years.

Over 41.3 million tax returns have been handled by the IRS this filing season. Return volume fell 2.4 percent from last year’s total. Total taxpayer refunds are greater despite fewer returns being processed.

The IRS has refunded $109.3 billion, per official figures. That’s roughly 7% higher than last filing season. Though fewer people filed early, those who did received higher refunds on average.

Recent federal tax legislation passed by President Donald Trump drove up refund checks. The One Big Beautiful Bill Act enhanced various taxpayer-impacting deductions and credits.

One of the biggest changes is the state and local tax deduction (SALT). The new law allows qualifying homeowners to deduct up to $40,000 in state and local taxes on their federal return. The deduction was previously $10,000. The SALT deduction was unlimited before President Trump’s 2017 Tax Cuts and Jobs Act.

The larger deduction is important in high-property-tax jurisdictions like New Jersey. New Jersey’s average property tax bill exceeds $10,000 for the second year. With the greater SALT ceiling, many state homeowners can deduct more of their payments, lowering their taxable income and increasing their refund.

Besides the SALT adjustment, the law made 2017 tax rates permanent. It raised the standard deduction and child tax credit. Businesses gain from enhanced tax savings. Together, these steps are increasing qualified taxpayer refunds.

Tax experts say refunds depend on income, filing status, and deductions. If their finances have changed, some households may not receive as much money back.

Taxpayers can verify their return status using the IRS’s “Where’s My Refund” tool or automated phone system. The New Jersey Division of Taxation’s official system or automated service line lets residents verify their state refund status.

Federal policy affects household finances, as shown by 2026 filing season statistics. Larger average refunds confirmed in the early weeks of filing show the real-world impact of greater deductions and permanent tax rate modifications.

More returns will be processed in the following weeks, and IRS numbers will show if this higher refund pattern continues through the tax season. Early data suggests that many Americans are receiving greater refund checks than previous year.

Sources:

Internal Revenue Service
New Jersey Division of Taxation
Federal tax legislation data from official U.S. government releases