Early IRS Data Shows 10.6% Surge in Average Tax Refunds for 2026 Filing Season

Early IRS data reveals a 10.6% jump in average tax refunds to $3,742 as filers utilize new deductions for tips, overtime, and auto loan interest in 2026.

By: AXL Media

Published: Mar 9, 2026, 7:07 AM EDT

Source: CNBC

The Impact of Schedule 1-A and New Deductions

A primary driver behind the larger refunds is the introduction of Schedule 1-A, a new tax form that accommodates several of the Trump administration’s signature tax breaks. These include specific deductions for tip income, overtime pay, seniors, and auto loan interest. According to IRS CEO Frank Bisignano, approximately 43% of returns filed as of early March included this new schedule. Filers utilizing these specific deductions reported refunds that were, on average, $775 larger than typical returns from the previous year, highlighting the strategic significance of these targeted tax incentives for the American workforce.

Seasonal Peaks and Credit Eligibility

The spike in refund amounts is a recurring seasonal trend, typically peaking in mid-February. This is the period when the IRS begins processing returns that claim the Earned Income Tax Credit (EITC) and the Additional Child Tax Credit (ACTC). A Bipartisan Policy Center analysis notes that once these low-to-moderate-income credits are factored in, the average refund tends to hit its high-water mark before gradually declining as Tax Day approaches. For 2026, the standard deduction has also been increased, providing a broader base of relief for the majority of filers who do not itemize.

Political Stakes and Economic Projections

The size of this year's refunds has become a central focus as the midterm elections approach. The White House previously projected that average refunds could jump by $1,000 or more, citing shifts in the tax landscape aimed at boosting middle-class spending power. While current data shows a 10.6% increase, some tax experts suggest the impact may be more modest for the average household. Tom O’Saben of the National Association of Tax Professionals noted that while the changes are providing meaningful relief, the difference for many filers is in the hundreds, rather than thousands, of dollars.