Bigger refunds are real but the $1,000 claim looks far off
The IRS reports that average refunds reached $3,623 for returns processed through March 13, 2026, a 10.8% increase from $3,271 at the same point last year. While this is a significant rise, it is about $350 higher, not the $1,000 increase promoted by the White House and President Trump.
This is relevant because refund season now serves as a political measure for the 2025 tax law. Republicans cite larger refunds as evidence that the law benefits households ahead of the November 2026 midterms, while early IRS data indicate the gains are real but uneven and still evolving.
The Law in Play
The filing-season change traces back to the One Big Beautiful Bill Act, which the IRS says was signed into law on July 4, 2025, as Public Law 119-21. For individual filers, the most visible new provisions are deductions for qualified tips, qualified overtime, certain car loan interest, and an enhanced deduction for seniors. Taxpayers claim these items on the new Schedule 1-A.
The main question is practical: how much of the new deductions will appear in 2026 refunds, and for which taxpayers? The administration argues the law should materially increase refunds throughout the filing season. However, many new deductions phase out by income, depend on specific circumstances, and may benefit later filers more than early ones.
Timeline
July 4, 2025: President Trump signed the One Big Beautiful Bill Act into law.
September 10, 2025: The IRS published withholding guidance tied to the new 2025 tax law changes.
January 26, 2026: The White House said average refunds were estimated to increase by about $1,000 per filer.
March 2, 2026: The IRS released new Schedule 1-A instructions for taxpayers claiming the four new deductions.
March 10, 2026: Treasury said over 27.5 million returns, or nearly 45% of processed returns, had claimed at least one new deduction.
March 13, 2026: The IRS reported an average refund of $3,623, up 10.8% year over year.
Present: Refunds are higher than last year but remain well below the White House’s advertised $1,000 average increase.
The Larger Story
This clearly illustrates the difference between enacted tax relief and visible household benefits. A deduction can be real and legally effective, yet still result in uneven refunds due to eligibility rules, withholding practices, and taxpayer behavior.
It also demonstrates how refund politics reduce tax administration to a single headline figure. This number is easy to communicate but difficult to interpret. Refund size reflects not only tax cuts, but also timing, withholding, filing order, and taxpayer eligibility for new deductions.
What it Really Means in Practice
Review 2025 returns using Schedule 1-A carefully. The new deductions are separate from the standard itemized deduction process.
Do not interpret average refund data as evidence that every client benefited equally. These aggregate figures can be skewed by the order in which returns are filed.
Verify income phaseouts and eligibility rules before assuming refund increases from tips, overtime, car loan interest, or the senior deduction.
Expect middle- and higher-income households to continue evaluating the political claims, as some targeted benefits may appear later in the filing cycle. This inference is based on the structure of the deductions and current filing-season timing.
In planning discussions, distinguish between refund amounts and total tax savings. A taxpayer may owe less overall without receiving a large refund if withholding was already adjusted during the year.
The next real checkpoint is the final month of filing season through April 15, 2026. Updated weekly IRS filing statistics should show whether the average refund keeps drifting down along its usual path or starts to reflect more late-filed returns claiming the new deductions.
The main point is not that refunds are small. Still, that tax-law messaging promised a universal result from deductions that actually operate more selectively and in more technical ways.