Many Americans are receiving larger refunds this tax filing season, largely due to new deductions introduced by the Big Beauty Act (OBBBA) enacted in July 2025. This marks the first tax season in which these provisions provide meaningful relief to workers and families.
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New deductions drive surge in refunds
early IRSThe data shows that as of mid-February 2026, the average refund amount was $3,804, an increase of about 10% from the same period last year. The increase reflects the impact of OBBBA changes that allow eligible taxpayers to reduce taxable income through new deductions that were not available in prior years.
IRS CEO Frank Bisignano highlighted these gains during a recent House Ways and Means Committee hearing. He reported that of the approximately 55 million returns processed to date, more than 4 in 10 included at least one new deduction, equivalent to more than 22 million Americans claiming deductions that did not previously exist.
For people who used at least one of the deductions, refunds increased by an average of $775. While multiple provisions contribute, including deductions for qualified tips, auto loan interest and higher amounts for seniors, the overtime wage deduction has drawn particular attention as a major driver for many working families.
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IRS Smooth Operations Addressing Workforce Challenges
Bisignano noted that despite a more than 20% reduction in the workforce, the 2026 application season is still effectively underway. Telephone wait times remain short and the online self-service tool successfully handles more inquiries.
