The White House believes Americans will soon start seeing President Trump’s economic policies pad their wallets thanks to the tax cuts passed in the Big Beautiful Bill.
The rules changed mid-year when Trump’s Big Beautiful Bill was signed, making many of its tax cuts retroactive to January 1 — but because the IRS did not update payroll forms or withholding tables during 2025, employers kept taking out taxes based on the old rules. When Americans file their 2025 taxes next year, the government will make calculations using the new rules, meaning many people will receive larger refund checks than usual.
“We didn’t pass the Big Beautiful Bill until the middle of the summer, so a lot of the tax changes which affected last year were not in any tax forms filled out in the beginning of the year,” said White House National Economic Council Director Kevin Hassett.
Those delayed changes, the White House argues, will result in what it calls the “largest tax refunds in American history,” which officials say will help improve affordability for Americans.
“I think we’re going to see $100 billion to $200 billion of refunds, which could be between $1,000 and $2,000 per household,” stated Treasury Secretary Scott Bessent.
Financial analysts have also weighed in on the expected impact. JPMorgan expects over 100 million Americans will receive a tax refund with an average amount of $3,743.
Several specific provisions of the Big Beautiful Bill will contribute to these record refunds. The bill increased the standard deduction by $750 for single filers and by $1,500 for joint filers, allowing people to subtract a large amount from their income before taxes are calculated. The bill also temporarily increases the State and Local Taxes deduction cap from $10,000 to $40,000. While these adjustments affect all taxpayers, workers who receive tips or overtime pay are expected to see even greater relief. Tip earners can deduct up to $25,000 in tip income, while workers who earn overtime can deduct up to $12,500.
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Other key provisions of the Big Beautiful Bill further expand financial relief. The legislation increased the child tax credit for tens of millions of families, made the paid leave tax credit permanent, raised the death tax exemption, shielded family farms from excessive taxation, and enhanced 529 savings accounts. Trump also helped the country’s youngest Americans by creating Trump Accounts, which are investment accounts for kids where earnings grow tax-free. As it does with children, the bill also helps seniors, who will receive an additional $6,000 standard deduction bonus if over 65 years old.
President Trump said under these cuts, “many families will be saving between $11,000 and $20,000 a year.”
The White House estimates the tax refunds will lead to a strong 2026.
“They’ll get a real increase in their wages. So I think 2026 can be a very good year,” Bessent said.
JPMorgan says that the tax refunds could even translate into a strong 2025 Holiday season as well.
“Moreover, it could even reach back to impact the holiday season this year. If consumers are confident that they will be getting bigger refund checks early in the new year, they may be willing to rack up more credit card debt in December, providing further near-term support to the economy.”
