One Big Beautiful Bill Act Plans Larger Tax Refunds for Millions in 2026

The One Big Beautiful Bill Act, signed by President Donald Trump in July 2025, is expected to lead to substantially larger tax refunds for millions of Americans when they file their 2025 tax returns in 2026. This increase, estimated at around $50 billion, is largely due to retroactive provisions of the law that have not yet been reflected in the IRS withholding tables, causing many taxpayers to overpay throughout the year. Key features include increased standard deductions, new deductions for seniors and those receiving tips or overtime pay, and a raised cap on state and local tax deductions, with the greatest benefits skewing toward higher-income households. While many taxpayers will see automatic larger refunds without needing to take special actions, economists warn that the bulk of the tax savings will benefit wealthier Americans. The IRS plans to update withholding tables in mid-2026 to better align with the new tax rates, which should reduce over-withholding in future years. These tax changes may provide a modest economic stimulus by increasing consumer spending and savings, particularly benefiting middle-class households facing high living costs.