Many Americans are receiving larger tax refunds this filing season, primarily due to new deductions introduced under the One Big Beautiful Bill Act (OBBBA), enacted in July 2025. This marks the first tax season where these provisions provide meaningful relief to workers and families.
Surge in refund amounts driven by new deductions
Early IRSdata shows refunds averaging $3,804 as of mid-February 2026, marking about a 10% increase from the same period last year. This uptick reflects the impact of the OBBBA’s changes, which allow eligible taxpayers to reduce their taxable income through fresh deductions unavailable in prior years.
IRS CEO Frank Bisignano emphasized these gains during a recent House Ways and Means Committee hearing. He reported that more than four in ten of the roughly 55 million returns processed so far included at least one new deduction—equating to over 22 million Americans claiming a break that did not exist previously.
For those utilizing at least one of these deductions, refunds have risen by an average of $775. While multiple provisions contribute, including deductions for qualified tips, car loan interest, and an enhanced amount for seniors, the overtime pay deduction has drawn particular attention as a key driver for many working households.
Smooth IRS operations amid workforce challenges
Bisignano noted that the 2026 filing season has proceeded effectively despite a workforce reduction of more than 20%. Telephone wait times remain low, and online self-service tools have handled more inquiries successfully.
