It’s Tax Day. Here’s how big the average tax refund is in 2026.

Tax Day has arrived once again, and this year the average tax refund stands at $3,462, showing an increase of 11% compared to the previous year. This data comes from the IRS, indicating a positive trend for taxpayers in 2026. Andrew Lautz, director of tax policy for the Bipartisan Policy Center, attributes this rise in refunds to the new deductions introduced under the “One Big Beautiful Bill Act” passed last year. These deductions help reduce taxable income, resulting in lower amounts owed to the IRS.

According to Lautz, many taxpayers are taking advantage of the changes that eliminate federal income taxes on tips and overtime pay. A survey conducted by the Bipartisan Policy Center revealed that about a third of respondents received either tipped income, overtime pay, or both. This indicates a widespread utilization of the new tax laws to maximize deductions and reduce tax liabilities.

Last year, 63% of filers received refunds, totaling 104 million taxpayers. This year, the IRS data shows that nearly 70 million filers have already received their tax returns. While refunds will continue to be issued after Tax Day, Lautz predicts that the average refund size will remain relatively stable. Investment bank Piper Sandler projected earlier this year that tax refunds could increase by up to $1,000 in 2026.

Don Schneider, deputy head of U.S. policy at Piper Sandler, emphasized that the impact of the One Big Beautiful Bill Act goes beyond just tax refunds. The $106 billion in retroactive tax relief provided by the act will also reduce the overall tax burden for Americans. This relief is expected to have a significant impact on taxpayers, especially with the inclusion of more overtime and tips in the calculations.

As taxpayers receive their refunds, many are already planning how to allocate the extra funds. A survey by the Bipartisan Policy Center found that 14% of taxpayers reported receiving significantly larger refunds this year. A significant portion of Americans intend to use the money to pay off debts, while others plan to put it into savings. With rising gas prices due to global events like the Iran war, some may need to allocate their refunds towards everyday expenses.

Economists from the Stanford Institute for Economic Policy Research estimate that the average U.S. household will spend an additional $740 on gas this year, doubling the average increase in refund sizes. This highlights the importance of budgeting and financial planning for taxpayers as they navigate the impact of tax refunds and rising expenses.

In conclusion, the 2026 tax season brings positive news for taxpayers, with higher average refunds and new deductions providing relief. As Americans receive their refunds, it is crucial to plan wisely and consider the broader financial implications of these changes.