Americans could see noticeably higher bank balances in early 2026, driven by a combination of tax refunds and stronger Social Security payment growth in select states. Treasury Secretary Scott Bessent says the upcoming tax season may deliver refunds ranging from $1,000 to $2,000 for many households, following the rollout of President Donald Trump’s One Big Beautiful Bill Act (OBBBA).
Speaking on the All-In Podcast, Bessent said most workers never updated their tax withholdings after the law was signed in July. As a result, they continued paying more federal tax than required throughout 2025. That overpayment is now expected to come back as a lump-sum refund when returns are filed in 2026.
The impact could be especially meaningful for retirees and fixed-income households. Five states are also projected to receive above-average Social Security payment increases in 2026 due to cost-of-living adjustments tied to regional inflation data. Combined with tax relief, the changes could mark one of the strongest refund cycles in recent U.S. history.
Nonpartisan analysts back up the claim. The Tax Foundation estimates the law reduced individual taxes by about $144 billion in 2025 alone. Because withholding tables were not updated in real time, much of that benefit is delayed until tax filing season. For millions of Americans, the result may be a larger refund check rather than gradual gains in take-home pay.What are Trump’s tax cuts under the One Big Beautiful Bill Act?The One Big Beautiful Bill Act, signed into law in July, introduced seven major federal tax reductions aimed at boosting household income. The changes include an expanded child tax credit, a higher standard deduction, and increased limits on state and local tax deductions. The law also added new or expanded deductions for seniors, along with targeted tax relief for tip income, overtime pay, and auto loan interest.
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These provisions apply retroactively from the beginning of the tax year. That timing matters. Because employers did not immediately update payroll withholding tables, most workers continued to have more federal tax withheld from their paychecks than required under the new law.
Why could 2026 tax refunds reach $2,000 for some households?Treasury Secretary Scott Bessent says the gap between outdated withholding rules and the new tax law is the main driver behind larger refunds. According to the Tax Foundation, about $100 billion could be returned to taxpayers during the 2026 filing season as refunds.Instead of receiving the tax cut benefits gradually through higher take-home pay in 2025, many households will get the full impact in a single refund. The final amount will vary based on income level, filing status, and the number of workers in the household.Which five states are expected to see higher Social Security boosts in 2026?Alongside larger tax refunds, Social Security recipients in five states are projected to receive bigger benefit increases than the national average in 2026. These higher payments are tied to regional inflation trends used in Social Security cost-of-living adjustment calculations.
Five Northeastern states lead in the size of the benefit increases:
ConnecticutNew JerseyNew HampshireDelawareMarylandFor retirees and fixed-income households, the combined effect of higher monthly benefits and larger tax refunds could offer meaningful short-term financial relief.What should taxpayers know about the IRS deadline and filing guidance for 2026?The IRS has set April 15, 2026, as the deadline for filing federal tax returns. Officials are urging taxpayers to prepare early by gathering W-2 forms, 1099s, bank account details, and records related to digital asset transactions.
In a November statement, the IRS warned that the One Big Beautiful Bill Act can significantly affect federal taxes, credits, and deductions. Treasury and IRS officials are continuing to release guidance on new provisions, including exemptions for tips, overtime pay, car loan interest, and temporary deductions for seniors.
For many Americans, the 2026 tax season could look very different from recent years, with larger refunds and stronger Social Security checks arriving at the same time.
FAQs:Q: How much could Americans actually receive in tax refunds in 2026 under Trump’s tax cuts? A: Treasury Secretary Scott Bessent estimates many households could see refunds between $1,000 and $2,000. The Tax Foundation projects roughly $100 billion in refunds nationwide. The increase stems from unchanged payroll withholdings after the law passed. Final amounts depend on income, filing status, and household earners.
Q: Why are Social Security payments expected to rise more in five states in 2026?
A: Social Security cost-of-living adjustments are partly influenced by regional inflation data. Five states are projected to exceed the national average increase in 2026. Higher local inflation boosts benefit calculations. Retirees in those states may see larger monthly checks alongside tax refunds.