URGENT UPDATE: New tax changes are set to significantly increase refund checks for millions of Americans in the upcoming 2026 tax season. Recent adjustments stemming from the One Big Beautiful Bill (OBBBA) and confirmations from the Internal Revenue Service (IRS) suggest refunds could rise by over $1,000 compared to previous years.
In a time when many families are grappling with the soaring cost of living, these changes promise financial relief. The IRS reported that the average refund in 2025 was approximately $3,151. With the new adjustments, this figure could surge to around $4,151 per taxpayer, reflecting a critical increase that could provide substantial support to struggling households.
Tax Credits and Refunds Enhanced by New Law
According to the Tax Foundation, the OBBBA has reduced individual taxes by $144 billion for 2025. Estimates indicate that up to $100 billion of this reduction may translate into higher refunds during the filing season. Treasury Secretary Scott Bessent stated that Americans can expect “huge” refund checks due to tax cuts from this legislation.
The standard deduction has also seen an increase, which will directly benefit taxpayers. Married couples filing jointly can now deduct $32,200, while single filers will enjoy a deduction of $16,100. Heads of household can claim $24,150. These adjustments are critical as they reduce taxable income and heighten the likelihood of receiving larger refunds.
Federal Tax Benefits That Matter
The enhancements in federal tax benefits are noteworthy. The maximum credit for employer-provided child care has risen from $150,000 to $500,000, with eligible small businesses able to claim up to $600,000. Additionally, the Earned Income Tax Credit has increased, with taxpayers having three or more qualifying children now eligible for up to $8,231 in 2026, up from $8,046 the previous year.
Other changes affecting refunds include an increase in the qualified transportation fringe benefit to $340 per month for 2026. The elimination of taxes on overtime pay and tips, along with an increase in the SALT deduction cap from $10,000 to $40,000, further contributes to the anticipated increase in refunds, which could total around $90 billion nationwide.
Impact on the Latino Community
For many Latino families, these increased credits and refunds represent essential financial support. The additional funds are often allocated towards paying off debts, catching up on rent, handling car repairs, and addressing medical expenses. However, the benefits won’t be uniform; households earning between $60,000 and $400,000 are expected to see the most significant increases in their refunds.
Analysts are optimistic. “When people file their tax returns, they will be surprised by sizable refunds,” said Don Schneider, an analyst at Piper Sandler. He emphasized that the total increase in refunds will surpass that of a typical tax year, as reported by CBS News.
What’s Next?
Tax returns for the 2025 tax year will be filed in early 2026, with most refunds expected to arrive within 21 days of filing. Staying informed and reviewing withholdings in advance will be crucial for taxpayers aiming to maximize their benefits and fully utilize the anticipated increase in refunds.
As these changes unfold, many will be keeping a close eye on how they can leverage the new tax laws to improve their financial situations. The potential for increased refunds in the 2026 tax season is a development that could reshape the financial landscape for millions across the United States.
