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By Sam Stevenson
Associate News Editor
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The IRS has announced that the 2026 tax filing season will open this month, bringing not only an earlier start but potentially larger refunds for many Americans.
Why It Matters
According to the Tax Foundation, a nonpartisan think tank in Washington, D.C., the new tax law provisions enacted under the One Big Beautiful Bill Act (OBBBA) may increase average refunds by $300 to $1,000, offering a significant financial boost for millions of households.
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These changes could inject billions into the economy during the refund season, impacting consumer spending and financial planning for U.S. taxpayers.
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What To Know
According to the IRS, the 2026 tax season will officially begin on Monday, January 26. That day marks the first opportunity for Americans to file their 2025 federal income tax returns.
The filing window lasts through April 15, 2026, after which late penalties or extension requirements apply.
The IRS expects about 164 million individual returns this year, with nearly all taxpayers filing electronically due to the agency phasing out paper refund checks for most individuals.
The OBBBA, passed by the Republican-controlled Congress and signed by President Donald Trump in July, created several new federal tax breaks, including:
- Higher Standard Deduction: The OBBBA made permanent the doubled standard deduction originally introduced under the 2017 Tax Cuts and Jobs Act.
- Increased Cap on State and Local Tax (SALT) Deductions: The SALT deduction cap was temporarily raised from $10,000 to $40,000, with incremental increases through 2029 before reverting to $10,000 in 2030.
- Additional Deduction for Seniors: Seniors aged 65 and older can claim an extra $6,000 deduction ($12,000 for joint filers) from 2025 through 2028.
- New Deductions for Tips, Overtime Pay, and Car Loan Interest: OBBBA introduced deductions—not full exemptions—for certain income and expenses:
• Tips: Up to $25,000 deduction for qualified tips.
• Overtime Pay: Up to $12,500 deduction for premium overtime wages.
• Car Loan Interest: Up to $10,000 annually for interest on qualifying auto loans for U.S.-assembled vehicles purchased between 2025 and 2028. - Child Tax Credit: The OBBBA largely retained the existing child tax credit structure from the TCJA, with minor adjustments, but there is no confirmed $200 increase.
Many of these provisions are retroactive to January 1, 2025, affecting returns filed in the 2026 season.
To claim major new deductions (including those for tips, overtime, auto loan interest, and the senior credit), filers must use a newly introduced Schedule 1-A.
What People Are Saying
IRS Acting Commissioner Scott Bessent said: "President Trump is committed to the taxpayers of this country and improving upon the successful tax filing season in 2025.
"Prior to the passage of the One, Big, Beautiful Bill, which delivered working families tax cuts, Treasury and IRS were diligently preparing to update forms and processes for the benefit of hardworking Americans, and I am confident in our ability to deliver results and drive growth for businesses and consumers alike."
IRS Chief Executive Officer Frank Bisignano said: "The Internal Revenue Service is ready to help taxpayers meet their tax filing and payment obligations during the 2026 filing season.
"As always, the IRS workforce remains vigilant and dedicated to their mission to serve the American taxpaying public. At the same time, IRS information systems have been updated to incorporate the new tax laws and are ready to efficiently and effectively process taxpayer returns during the filing season."
Adam Brewer, tax attorney with AB Tax Law, told Nexstar: "Because of the changes within the Big Beautiful Bill most taxpayers should expect to see a larger refund in 2025, but how much they receive will really depend on the specifics of their tax situation."
Erica York, Vice President of Federal Tax Policy at the Tax Foundation, wrote: "When taxpayers file their 2025 tax returns in 2026, many will see larger refunds than in recent years. That’s due to the One Big Beautiful Bill Act (OBBBA), which reduced individual income taxes for 2025 by an estimated $144 billion."
She added: "Refunds will undoubtedly rise for millions of taxpayers under the OBBBA, reflecting the law’s reduction in individual tax burdens, but simply putting more cash into people’s pockets is not why the tax law is expected to boost long-run economic growth."
What Happens Next
Taxpayers should begin to organize documents and review IRS guidance, especially concerning the new Schedule 1-A form. Direct deposit will be essential for faster refunds, as paper checks are largely discontinued.
The IRS says refund status information is usually available 24 hours after e-filing, and most refunds are issued within 21 days. Some tax credits, such as the Earned Income Tax Credit, may take longer by law.
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