Will 2026 tax returns be bigger? Not for everyone.

Tax refunds are supposed to be huge this year, but many Americans may find theirs isn’t one of them, some analysts said.

At the start of tax season, the White House said 2026 would see the "biggest tax refund season ever," with average refunds projected to rise by $1,000 or more due to President Donald Trump’s signature tax and spending bill passed last summer. Refunds were supposed to get a boost from an increased standard deduction and new provisions such as no tax on tips, overtime and auto loan interest for certain cars as well as a new senior deduction.

Tax season isn’t over so refund amounts may move higher but so far, the average tax refund has been much smaller than predicted. As of the week ending March 20, average tax refunds were up 10.9%, or just a few hundred dollars, to $3,571 from $3,221 from the same time last year, IRS data shows.

"If you’re questioning why your tax refund is so low, you’re not the only one," according to H&R Block’s tax blog. "Many taxpayers who have filed their tax return are wondering the same thing."

Why aren’t tax refunds as large as predicted?

Explanations vary, with H&R Block suggesting some reasons for smaller-than-expected refunds could be:

• Gig workers who didn’t realize they owed estimated taxes on that income and missed those payments or have had to pay penalties for tax underpayment.
• Not completing a W-4 and accounting for withholding at every job you work or got a raise without increasing withholding. Either of those could mean a withholding shortfall that might shrink a refund.
• Eligibility changes for tax credits and deductions could dent the size of a refund. For example, if your child turned 17 years old before year end, the credit for your kid may be the smaller $500 maximum dependent credit rather than the child tax credit worth a maximum of $2,000.
• Garnishment for unpaid debts like child support.

Uneven tax law benefits?

Another reason many Americans may not be seeing the large tax refund many had forecasted is because they’re concentrated among select groups of filers, wrote Corey Husak, director of tax policy at Center for American Progress, in a report earlier this year.

Fewer than half (48.8%) of American households making less than $100,000 will receive an increased refund this year, while nearly all Americans (93.1%) earning more than $100,000 will receive an increased refund, he estimated.

However, the uneveness in refunds in dollar amounts is partly due to how taxes are paid, too, said Eric Steffy, senior federal benefits expert and chief executive of Federal Solutions Support.

"It’s true that higher earners often see larger tax savings in dollar terms, but that’s because they’re paying more to begin with," Steffy said. "Our tax system is designed so that households with lower income have a lower tax rate, often around 12%, while higher earners are taxed at significantly higher rates, sometimes 32% or more."

Who will get much larger refunds?

Larger tax refunds "heavily depends on whether a taxpayer is part of one of the groups favored with tax cuts under the law," Husak said.

Most (55%) of the increased tax refunds, he said, will go to just these two groups of people: those earning qualified overtime pay or those who pay large amounts of state and local taxes, he said.

For 2025, the SALT (state and local tax) deduction cap increased to $40,000 from $10,000. To claim SALT, total itemized deductions must exceed the standard deduction. Previously, "the very wealthy had no tax benefit as their SALT cap was $10,000 and they received no child tax credit due to income phaseouts," said Richard Pon, a certified public accountant in San Francisco.

Anyone who works overtime can deduct the overtime amount up to $12,500 for single filers or $25,000 for joint filers. The deduction starts to phase out once modified adjusted gross income is above $150,000 for single filers or $300,000 for married couples filing jointly, and you may have to calculate the amount yourself this year.

But that's not to say that millions of Americans aren't benefitting from the new tax laws, Steffy said.

"Because taxpayers were told to expect bigger refunds, there’s going to be a big disconnect if that refund comes back at only a few hundred over last year’s refund," he said. "That’s because for some taxpayers the tax relief showed up as higher take-home pay since less taxes were being taken out of their regular paycheck during the year. When tax-withholding drops, the tax relief shows up incrementally as more pay in paychecks instead of in a final tax-time lump refund."

So a smaller-than expected tax refund may really just be "that tax relief is increasingly delivered upfront, turning what used to be a big-happy-refund check into a steady increase in take-home pay," he said.

Medora Lee is a money, markets, and personal finance reporter at USA TODAY. You can reach her at [email protected] and subscribe to our free Daily Money newsletter for personal finance tips and business news every Monday through Friday.