Tuesday July 21, 2026
Washington News
Tax Refunds $43 Billion Higher This Year
On April 17, the Internal Revenue Service (IRS) reported that it had issued approximately $296 billion in tax refunds. This is an increase of about 17% compared to the prior year. For the 2025 tax year, the average refund amount to date was $3,275. This amount is about $300 higher compared to last year.
On April 22, 2026, Treasury Secretary Scott Bessent spoke before the U.S. Senate Committee of Appropriations and discussed the new tax provisions. Secretary Bessent pointed out that there were three substantial tax benefits for individuals that resulted in higher refunds.
The senior citizen deduction of $6,000 ($12,000 for a married couple filing jointly) was claimed by 31 million taxpayers. This deduction is in addition to the standard deduction and is available for years 2025 through 2028. With the additional senior deduction, an estimated 88% of Social Security benefit recipients did not pay tax on that retirement payment.
Working individuals benefited from the overtime compensation deduction. This deduction can reach $12,500 ($25,000 for a married couple filing jointly). Over 28 million taxpayers have claimed this deduction for 2025. This deduction phases out for single persons with incomes over $150,000 or couples with incomes over $300,000.
The third tax benefit was the deduction of up to $25,000 of qualified tip income. Over seven million taxpayers claimed this deduction. This deduction is allowed in addition to the standard deduction. The tip deduction phases out for single persons with incomes over $150,000 or couples with income over $300,000.
The IRS data suggests that approximately the same number of taxpayers filed this year as in prior years. The IRS did note a small increase of 500,000 returns being processed this filing season. The IRS also noted that there was a 1% increase in the number of returns filed electronically.
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