April 15 marks the end of a necessary, yet often frustrating, period for many taxpayers. Despite this, the One Big Beautiful Bill Act, otherwise known as the Working Families Tax Cuts (WFTC), will bring tax cuts to millions of families. Here is what we know about the 2026 tax filing season thus far.
Higher Refunds
Overall, average tax refunds are $3,521 per taxpayer, an increase of $351 or 11% from last year. The total amount of tax refunded so far has reached over $221 billion, representing a 13% from last year. About 70% of all tax returns filed this year have resulted in a refund, a larger share than in recent years. These figures will change slightly as the IRS continues to process returns filed later in the season, but refunds are on trend to be higher across the board this year.
Millions Claiming New Deductions
The new tax deductions included in the WFTC are some of the most important changes to this tax filing season. These new deductions, as well as boosts to existing deductions, are temporary, expiring in 2028.
According to a statement from Treasury Secretary Scott Bessent at the end of March, more than 4.6 million taxpayers claimed the new tipped income deduction, falling short of official estimates that more than 10 million taxpayers would report tipped income when filing. In contrast, around 20 million taxpayers representing more than 25% of tax returns thus far have claimed the new overtime deduction, double the amount projected. Taxpayers can also claim a deduction on auto loan interest paid, yet the number who have claimed that thus far is uncertain.
Boosted Deductions Have Mixed Benefit
In addition, existing deductions for seniors, state and local taxes (SALT), and small businesses were increased by the WFTC.
Seniors are getting an additional $6,000 deduction, or $12,000 for married couples this year, with the White House Council of Economic Advisors previously estimating that this provision would benefit 33.9 million people. It is still unclear how many seniors have actually benefited from the additional deduction this filing season.
The cap on SALT deductions, originally implemented by the Tax Cuts and Jobs Act of 2017, was lifted from $10,000 to $40,000 for this filing season. Taxpayers who are generally high-earners are receiving a large tax cut this filing season by deducting four times as much of their state and local tax payments on their federal tax returns. The Tax Foundation estimates that about one quarter of the value of the tax cuts provided by the new tax law are solely from the SALT cap increase.
Businesses are also receiving tax cuts. As of the end of March, the 20% pass-through deduction made permanent by the WFTC had provided an average tax cut of $4,600 to 8 million business owners. The number of business owners receiving the deduction will likely increase as more returns are processed, given that more than 26 million taxpayers claimed the deduction in 2023, the most recent year that data is available. We have yet to see how much businesses stand to gain from restored immediate expensing of research and development (R&D) and permanent full expensing.
Minimal Taxpayer Service Disruptions
With the IRS losing 27% of staff, questions around its ability to provide adequate taxpayer service have loomed. This is exacerbated by concerns that critical technological upgrades were not made prior to the beginning of filing season that otherwise would have streamlined tax processing. While official statistics on the level and quality of service provided to taxpayers will be released after tax filing season, data thus far indicate that there have been minimal service disruptions.
The IRS reports as of early April that more than 80% of refunds have been issued in less than 21 days, which is in line with its goal to issue most refunds within that amount of time. IRS Chief Executive Officer Frank Bisignano testified in early March that the IRS hired 2,200 customer service representatives to speak to taxpayers on the phone in advance of this filing season. He also stated that the IRS is offering additional hours at Taxpayer Assistance Centers around the country, including on Saturdays. Furthermore, the IRS is using new customer service metrics that we hope to see published after filing season.
In addition, only about 1% of taxpayers have received a CP53E notice this year asking for updated bank information for direct deposit purposes as the IRS phases out paper checks due to an executive order. Although only a small number of taxpayers have received this notice, the impact on those that have could be significant. Taxpayers have 30 days to provide their bank information upon receiving the notice or the IRS will send a paper check in six weeks. Including the initial time it takes for the IRS to process a refund, delaying sending a paper check for that long could cause taxpayers to wait nearly three months to receive a refund.
The Big Picture
Tax changes made by the WFTC will have lasting effects, with the impact only beginning to show through the data released leading up to Tax Day 2026.
With taxpayers spending a total of nearly 2 billion hours annually filing individual income taxes alongside growing out-of-pocket costs for filing, many will be relieved to see a tax refund, even if it amounts to an interest free loan to the government. WFTC will likely increase the share of taxpayers who do not pay any taxes at all, which was around 31% in 2022, the most recent year for which data is available.
As we wait for additional data on the amount of tax cuts taxpayers received this season and the quality of service provided by the IRS, we are pleased to count this as a successful tax filing season given the information thus far.