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Why Some Americans Could Get a $1,000 Bigger Tax Refund in 2026

A new analysis cited by the White House suggests some taxpayers could see larger refunds in 2026.

By Kristin Hitchcock

Edited by Andrea Basse

Updated Jan. 12, 2026

Most people don't expect their tax refund to change much year to year. Maybe it nudges up a few hundred dollars. Maybe it shrinks. But a new analysis tied to recent tax law changes suggests 2026 could look very different for some households, potentially by as much as $1,000.

That kind of jump doesn't happen by accident, and it's not guaranteed. But understanding why it might happen can help you avoid ways even smart people waste money when tax season rolls around.

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Why 2026 is getting so much attention

A financial analysis by Piper Sandler, which has been cited by the White House in discussions around tax policy, estimates that some households could see their refunds increase by roughly $1,000 in 2026 compared to recent years.

This projection isn't about a single "refund check." Instead, it reflects the combined effect of several tax provisions that are scheduled to change or reset, particularly those connected to the 2017 Tax Cuts and Jobs Act (TCJA).

Many of the TCJA's individual tax provisions are temporary and set to expire after 2025 unless Congress acts. That creates a unique window where tax outcomes could shift noticeably, depending on the income level, filing status, and deductions.

Several moving parts are contributing to the projected increases.

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Standard deduction and bracket adjustments

The TCJA significantly increased the standard deduction, which reduced taxable income for millions of households. While inflation adjustments continue, parts of the structure are scheduled to sunset after 2025.

Depending on how Congress handles extensions or replacements, some filers could temporarily benefit from transitional rules or timing effects that boost refunds in 2026.

Child-related tax credits

Credits like the Child Tax Credit have changed repeatedly over the past few years. Even modest adjustments (such as eligibility thresholds or refundable portions) can move refunds by hundreds of dollars for families with kids.

Households with one or two dependents tend to feel these changes most sharply.

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Withholding mismatches

Another overlooked factor: many workers' paychecks haven't fully caught up with recent tax rule adjustments. If withholding tables lag behind updated policy, taxpayers may overpay throughout the year and only realize it when they file.

That's one reason refunds can appear to "jump" even without huge tax cuts.

Expanded tax credits and refundability

The One Big Beautiful Bill increased or expanded several credits that can directly increase refund amounts for eligible taxpayers. For example, the Child Tax Credit amount went up, and other credits (like the Adoption Credit) now have a refundable component, meaning taxpayers can receive more back even if their tax liability is already fully offset.

Larger itemized deduction opportunities

The One Big Beautiful Bill also boosted deductions like the state and local tax (SALT) cap, making it possible for some filers who itemize to reduce taxable income further than under prior rules. Database estimates suggest this increases the potential tax benefit for taxpayers in high-tax states.

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Why a bigger refund isn't always "extra money"

It can be tempting to treat a large refund like a bonus. However, in reality, it often means you overpaid during the year.

A refund increase doesn't necessarily mean you paid less tax overall, just that the timing shifted. That's one of the ways even smart people waste money without realizing it: giving the IRS an interest-free loan.

If 2026 does bring a larger refund for you, it may be a signal to review your W-4 and adjust withholding so more of your money stays in your paycheck throughout the year.

What you can do now to prepare

You don't need to wait months to act. A few proactive steps can help you stay ahead:

Review your current withholding using the IRS estimator
Track changes to tax credits that apply to your household
Revisit your filing status if your family or income situation has changed
Plan for flexibility, since Congress could still modify or extend parts of the current law

Even small adjustments now can prevent surprises later on.

The bigger picture

Tax laws can sound abstract, but they show up in very real ways: smaller paychecks, larger refunds, and unexpected balances due. The potential $1,000 refund increase in 2026 isn't guaranteed, but it highlights how sensitive household finances are to policy shifts.

Understanding what's changing (and why) puts you in a better position to keep more of your own money, instead of reacting after the fact.

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Bottom line

Some taxpayers could see meaningfully larger refunds in 2026, potentially around $1,000, largely due to a mix of expiring tax provisions and updated deductions. While not everyone will benefit, middle-income households and families with dependents are among those most likely to see a noticeable difference if current projections hold.

The IRS typically adjusts withholding tables after major tax changes take effect, not before. That lag can quietly push more money out of paychecks during the year, only for it to come back at filing time. In other words, a bigger refund may reflect timing more than anything else. Understanding how tax law shifts affect your paycheck can help you prepare yourself financially for whatever tax season brings.

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