Here’s how Americans say they plan to use their bigger tax refunds this year

Tax refunds in 2026 are expected to be larger than ever before, thanks to the recent tax bill signed into law by President Trump. According to Bank of America Global Research, many Americans are already making plans for how they will use this extra money. The most common use of tax refunds, which are often the largest check of the year for many households, is paying down debt.

A survey conducted by Bank of America found that 36% of respondents plan to use their IRS refund to reduce their debt. About 10% said they would make a major purchase or cover everyday expenses, while 13% expect to put the money into savings. Household debt in the U.S. has been on the rise, with Americans relying more on credit cards for daily expenses and taking out larger loans due to increasing car and home prices. Despite these higher balances, many Americans prioritize paying down debt when they receive a windfall, as seen in previous years.

Tax season 2026 is expected to provide a significant boost for millions of households, with Wall Street analysts estimating that the typical refund check could be about 30% higher than the previous year. This increase could mean an extra $1,000 in refunds, bringing the average check to around $4,000. So far, IRS data shows that refunds are already 14% higher than at the same point last year, with amounts typically rising as the season progresses.

Bigger refunds could help improve the financial resilience of many households, as a Bank of America Institute report found that low- and middle-income Americans tend to keep some of their refund money in their bank accounts for at least six months. However, not everyone is expecting a substantial refund this year, with about 32% of respondents in the Bank of America survey stating that they do not expect any refunds from the IRS.

In conclusion, tax refunds in 2026 are expected to be supersized, providing an opportunity for many Americans to pay down debt, make major purchases, cover expenses, or boost their savings. The extra money could help improve financial stability and resilience for households across the country.