MW Tax refunds are about $775 higher this year for people claiming Trump's new tax breaks, IRS head says
Andrew Keshner
More than four in 10 returns so far have claimed at least one of the new deductions
Internal Revenue Service CEO Frank Bisignano testified about the 2026 tax-filing season on Wednesday before the House Ways and Means Committee. The new tax breaks are resulting in bigger refunds for taxpayers, he said.
Americans are getting hundreds of dollars more in their tax refunds when they claim the new tax breaks that President Donald Trump added to the tax code, the IRS's leader said Wednesday.
The new numbers offer an early look directly from the Internal Revenue Service at how Trump's new tax law is trickling down into Americans' tax returns.
The Republican-led tax law created new deductions for tipped pay and overtime pay, as well as tax breaks for senior citizens and consumers buying American-made cars.
So far, more than four in 10 of the approximately 55 million income-tax returns filed this tax season have claimed at least one of those new tax breaks, said Frank Bisignano, the first CEO of the IRS, at a House Ways and Means Committee hearing Wednesday.
When households claim at least one of these deductions, their refunds are on average $775 higher, Bisignano said.
So far, the $12,500 overtime-pay tax break has been the most frequently used deduction and the $6,000 senior bonus has provided the biggest increase to the size of people's refunds, he said.
It is "dominantly" households with adjusted gross incomes below $100,000 that have been claiming these breaks, Bisignano said. By the time tax season is complete, the average refund for people claiming these breaks could reach $1,000, he said.
The IRS staff has shrunk and there are many new tax rules this year, but Bisignano said this year's filing season is going smoothly. The end result is "bigger refunds, faster," he said - even though Democrats at the hearing said refunds weren't living up to the hype from the Trump administration.
The White House has promised "HUGE" tax refunds this year, and some projections ahead of tax season said refunds could be up to $1,000 higher than last year.
Through late February, refunds overall were averaging $3,804, according to IRS statistics. That's $351 more than the average refund at the same point last year, or 10% higher.
Bisignano's testimony came as economists, Wall Street analysts and, especially, everyday Americans are focused on the size of 2026 refunds.
This year's tax refunds are indeed larger compared to last year so far - but they aren't quite as jumbo-sized as some expected them to be, Bank of America analysts said Wednesday.
The refund averages cited by Bisignano align with other projections on how the new tax law would affect refunds, said Garrett Watson, director of policy analysis at the Tax Foundation. "The news that the overtime and senior deductions are major contributors makes sense," he said.
The new tax deductions are slated to stay in effect through 2028. The deduction for overtime pay only counts for a portion of the money. If a person is paid time and a half, it's the "half" part that is tax-deductible, according to the IRS.
Bisignano said IRS operations were going smoothly this tax season, despite having less staff. Telephone wait times have been low and more people were getting answers to their questions online, he said. The agency's workforce is down more than 20% and some observers had worried if operations would suffer at a crucial moment.
There were dueling views from both parties on the tax collector's customer service.
Rep. Terri Sewell, a Democrat from Alabama, said calls from constituents with tax-return issues have "increased exponentially." The gains that taxpayers are seeing in their refund amounts are also undercut by the fact that they're paying more for consumer goods due to Trump's tariffs, or more expensive healthcare premiums, she said.
Rep. Kevin Hern, a Republican from Oklahoma, said his staff and other committee members used to get so many calls about the IRS in past seasons, they might as well have been part of the IRS themselves. "I want to applaud you because I have had zero - zero - people reach out to me during this tax season about the IRS," he said.
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-Andrew Keshner
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(END) Dow Jones Newswires
March 04, 2026 16:08 ET (21:08 GMT)
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