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By Hugh Cameron
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President Donald Trump's signature tax bill could result in "gigantic" refunds for Americans in the first quarter of 2026, according to Treasury Secretary Scott Bessent.
During an appearance on the All-In Podcast on Tuesday, Bessent, who also serves as the acting commissioner of the IRS, said the retroactive effects of the One Big Beautiful Bill Act (OBBBA) meant households could see "$1,000, $2,000 refunds" after they file early next year.
Newsweek has contacted the IRS for comment via email.
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Why It Matters
For many households, annual tax refunds often represent the largest one-time payment they receive all year, and the administration has repeatedly touted the upcoming refunds as a financial boon for Americans, many of which are struggling to make ends meet.
But beyond refunds and the tax breaks included in the OBBBA, independent groups have warned that Trump's marquee legislation will swell the U.S. deficit, and that its benefits are largely reserved for higher-income individuals and businesses. According to the Congressional Budget Office, households in the top 10 percent will see an additional $12,000 on average over the 2026 to 2034 period, while those in the poorest 10 percent will lose out on $1,600 per year—in part because of cuts to Medicaid and food assistance programs.
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What To Know
Bessent had previously said households should expect "very large refunds" in 2026 compared to previous years, a windfall stemming from provisions in the OBBBA. Trump signed the legislation into law in July, and its provisions are retroactive to the beginning of 2025.
The White House has cited recent research from the financial services firm Piper Sandler to back up these predictions. The firm, quoted by CBS, estimated that the typical refund check could increase by $1,000 compared to the 2025 filing season to reach $4,151 per filer.
The windfall stems from retroactive breaks written into the OBBBA, and Bessent estimated that the refunds could total between $1,000 and $2,000 for most Americans, depending on their income levels and reliance on tips and overtime pay.
During a podcast in October, Piper Sandler economist Don Schneider said employees had likely not changed their withholding—the amount taken from paychecks during the year—following the OBBBA to account for the retroactive cuts.
"People really aren't adjusting their withholding this year. It would be pretty difficult to do so—you don't even know how much of a tax cut you're going to get from overtime or tips or something," Schneider said, adding, "When people go to file, I think they'll be surprised by really, really large refunds."
"In a typical year, we might have about $270 billion in individual income tax refunds, and that could be as high as that plus another $90 billion," he said. "So it could be one of the largest refund seasons ever."
However, Schneider said the refunds and tax break benefits would be "really concentrated in kind of the middle- and middle-upper income part of the income distribution."
What People Are Saying
Treasury Secretary and acting IRS Commissioner Scott Bessent told NBC10 Philadelphia in early December: "The bill was passed in July. Working Americans didn't change their withholding, so they're going to be getting very large refunds in the first quarter. I think we're going to see $100-$150 billion of refunds, which could be between $1,000, $2,000 per household. Then they'll change their withholding, and they'll get a real increase in their wages."
What Happens Next
Tax filing season begins in January, with most Americans preparing their returns before the deadline on April 15. Refunds are typically issued within 21 days.
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