01/26/2026
From 2010 through 2019, the average federal tax refund was remarkably flat, hovering just below $3,000 most years. The pandemic year of 2020 marked a sharp dip, followed by a rebound in 2021 and a spike in 2022, when the average refund jumped to $3,252. Since then, the average refund has remained over $3,000, coming in at $3,167 in 2023 and 2025, and $3,138 in 2024.
The 2026 filing season is shaping up to deliver even larger refunds for many taxpayers, largely due to retroactive changes enacted under OBBBA, which expanded the standard deduction, increased child-related credits, and introduced new deductions for overtime and tip income. Because the IRS did not update withholding tables when those changes took effect in mid-2025, many taxpayers will have overpaid during the year, setting the stage for bigger refunds when they file.
Who benefits most will depend on individual circumstances, but the biggest bumps are expected among middle-income households, families with children, workers with overtime or tip income, and some older taxpayers. Estimates suggest the average increase could be around $1,000, pushing the typical refund above $4,000. That bump is likely temporary: Once withholding tables are updated, more money should flow into paychecks during the year, and refunds may shrink again. And while a larger refund can feel like a win, it’s still just the return of excess tax paid—often the result of overwithholding rather than a true windfall.
Related article here: https://www.forbes.com/sites/kellyphillipserb/2026/01/21/why-your-tax-refund-could-be-bigger-in-2026-and-what-else-you-need-to-know/
