- Average tax refunds rose to $3,462 during the 2026 filing season thanks to new deductions.
- Over 27 million returns claimed new Schedule 1-A deductions, including overtime pay and senior credits.
- Taxpayers benefited from above-the-line deductions that lower taxable income regardless of itemization status.
(UNITED STATES) — Americans claimed new deductions from the One Big Beautiful Bill during the 2026 filing season and pushed average tax refunds sharply higher, with the average refund reaching $3,462 through April 3.
Mid-season figures showed an average refund of more than $3,700 across 63.5 million processed returns. Nearly 45% of returns, more than 27.5 million, claimed at least one new deduction on Schedule 1-A.
Those claims lifted refunds because many of the new breaks were not reflected in 2025 paycheck withholding. Taxpayers who qualified often received the benefit in one shot when they filed, rather than seeing it spread across the year.
The new provisions work as above-the-line deductions. That means both itemizers and non-itemizers can claim them, and the deductions reduce taxable income directly.
Several of the breaks begin to phase out at higher income levels. The enhanced senior deduction, for example, phases out above $75,000 in MAGI for single filers or $150,000 for joint filers.
One of the most widely used provisions has been the deduction for overtime pay. Filers can deduct up to $12,500 in qualified overtime, or up to $25,000 for joint filers, and more than 15.5 million returns had claimed it by mid-season.
Tipped workers also used a new deduction that allows up to $25,000 for qualified tips. More than 3.5 million returns had claimed that break.
Older Americans added another large pool of claims. The enhanced senior deduction gives an additional $6,000 per person age 65 or older, or $12,000 on a joint return, and more than 9.2 million returns had claimed it.
Another deduction covers car loan interest. Eligible filers can deduct up to $10,000 on qualified passenger vehicle loans, adding one more route to a lower tax bill for households that financed a new personal-use vehicle.
An above-the-line charitable deduction also starts in 2026. It allows up to $1,000, or $2,000 for joint filers, and it has begun to appear in claims during the filing season.
Tax refunds also rose because the standard deduction increased for tax year 2025, which taxpayers are filing in 2026. More than 90% of taxpayers use the standard deduction instead of itemizing, so any change in those amounts reaches a broad share of households.
The standard deduction rose to $15,750 for single filers, $31,500 for joint filers, and $23,625 for heads of household. Those amounts were about 7.9% higher than in 2024.
The timing of the law mattered. The mid-year boost from the One Big Beautiful Bill did not feed into withholding tables in time to show up in many workers’ paychecks, so the full effect arrived later in the form of larger refunds.
That dynamic helps explain why the 2026 season stands above the prior year. The current average exceeds the 2025 average refund of $3,100, and the law’s tax cuts have added hundreds to thousands of dollars for eligible filers.
Some of the biggest dollar benefits sit outside the broad deductions claimed on Schedule 1-A. The law raised the cap on the state and local tax deduction to $40,000 for 2025, though it phases down to $10,000 above $500,000 in MAGI.
That change mainly helps higher-income itemizers, not the majority of taxpayers who take the standard deduction. Even so, it adds to the list of provisions that can widen the gap between 2025 liability and what employers withheld during the year.
The law also restored deductibility for private mortgage insurance, or PMI. That provision gives some homeowners another way to trim taxable income, especially those who do not have enough deductions to rely on broader itemized categories alone.
The filing data show that the biggest volume still came from deductions available to a wide range of workers and retirees. More than 27.5 million returns claiming at least one new break means the added provisions reached far beyond a narrow band of high earners.
Overtime led the count with more than 15.5 million claims. The senior deduction followed with more than 9.2 million, and the tips deduction added more than 3.5 million.
Those figures overlap because a single return can claim more than one deduction. A retiree with wage income, or a joint filer with overtime pay and a qualifying spouse age 65 or older, could stack multiple provisions and further reduce taxable income.
The broad use of the new deductions also shows how the law changed filing behavior in its first season. Rather than relying only on the familiar choice between itemizing and taking the standard deduction, many households now combine the standard deduction with one or more above-the-line write-offs.
That structure matters because it widens access. A taxpayer does not need enough mortgage interest, charitable gifts, or state taxes to itemize before claiming deductions for tips, overtime, or the senior benefit.
Processing speed remains another factor in how quickly households see the money. Refunds move fastest through electronic filing and direct deposit, which usually deliver payment in less than 21 days.
Paper returns and mailed checks generally take longer, even in years without a major change in tax law. In a season shaped by new deductions and heavier use of Schedule 1-A, filing method can determine how soon a larger refund actually reaches a bank account.
The current numbers offer a snapshot rather than a final tally, but they already capture the scale of the shift. With 63.5 million processed returns and an average above $3,700 by mid-season, the 2026 filing year has turned the new deductions in the One Big Beautiful Bill into one of the clearest drivers of larger tax refunds.
