IRS Tax Refunds Near $3,800 in 2026 – Here’s What Taxpayers Need to Know

This year, millions of people in the United States received larger tax refunds in their bank accounts than last year. When many people saw the larger amount in their accounts, they thought there might have been a mistake, but that’s not the case. In fact, the Internal Revenue Service (IRS) has confirmed that the average federal tax refund this tax season is reaching nearly $3,800. At a time when gas prices are rising and inflation is putting pressure on family budgets, this additional amount comes as a welcome relief to many.

According to IRS data, the average refund received by individual tax filers by mid-February had reached $3,804, nearly 10% more than the same period last year. Although this average declined slightly to $3,742 in the February 27th report, the year-over-year increase remains over 10.6%. So far this tax season, the government has processed over 36 million returns and issued refunds totaling over $136 billion.

The Real Reason for the Increase in Refunds This Year

A significant legal change is responsible for the increase in tax refunds. The One Big Beautiful Bill Act (OBBBA), signed by President Donald Trump in July 2025, made several significant changes to the tax system. The impact of these changes is clearly visible in this year’s tax season.

This new law provides new tax deductions for overtime and tip income. Additionally, the standard deduction for married couples has been increased to approximately $31,500. Additionally, the limits on the state and local tax deduction (SALT deduction) have been significantly liberalized.

However, experts say the impact of these changes will vary from person to person. According to Tom O’Seben, tax content director at the National Association of Tax Professionals, “In most cases, people are benefiting by hundreds of dollars, not thousands.” This means that every taxpayer won’t see a significant difference, but on average, there is a significant benefit.

Refunds May Be Delayed Due to Tax Credits

There’s also a technical reason for the sudden increase in the average refund amount in mid-February. By law, the IRS cannot issue refunds related to the Earned Income Tax Credit (EITC) and the Additional Child Tax Credit before February 15th.

As refunds related to these credits begin processing, the average refund amount increases rapidly. According to tax policy expert Andrew Lotz, the average refund appears larger as the second half of February approaches, as payments related to these credits are factored in.

Could itemizing be beneficial instead of the standard deduction this year?

Most Americans opt for the standard deduction when filing taxes because it’s easier. However, this year, tax advisors believe that the itemized deduction may be better for some, especially those who have purchased a home in recent years.

Mortgage rates have averaged around 6.69% over the past two years, leading to a higher interest burden in the early years. Therefore, combining the mortgage interest deduction with the SALT deduction could prove more beneficial than the standard deduction in many cases.

The Pace of Tax Season and How to Track Refunds

However, the pace of tax season has been a bit slower this year. In the initial weeks, the IRS received approximately 32 million returns and issued approximately 13 million refunds, a slight decrease from last year. The agency estimates that approximately 164 million tax returns will be filed before the April 15th deadline.

Those who file their returns electronically typically receive their refunds within 21 days. Those who file paper returns may have to wait at least an additional week. The IRS has also provided an online tool called “Where’s My Refund” that allows taxpayers to track the status of their refunds in real time.

In this way, the increase in tax refunds this year has brought financial relief to many, although the impact may vary from person to person.

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