The Internal Revenue Service (IRS) collected a record $5.6 trillion in fiscal 2026, nearly 5 percent more than the previous year, and reported larger refunds after passage of the Working Families Tax Cuts. About 90 percent of people who filed electronically received refunds in less than 21 days, the agency said in its Oct. 29 release.
Background: IRS Processes 98% of Returns Despite Staffing and Tech Strains Ahead of 2026
Refund amounts rose on several measures. The total dollar amount claimed increased by 17 percent, the average refund climbed 11 percent, and the amount distributed to taxpayers grew by over 20 percent compared with 2025.
Frank J. Bisignano, the agency’s chief executive officer, credited its employees and described the filing season as a success. He also said the agency was working toward a digital-first service model.
“With our dedicated workforce, we delivered a successful tax filing season and continue to transform the IRS into a Digital-First agency that provides the best possible experience for taxpayers, improves collections, and safeguards privacy.”
The release gives a share of electronic filers who received refunds within 21 days. It does not provide a year-over-year processing-time comparison. Bisignano separately described faster direct-deposit timing in congressional testimony earlier in the year.
Electronic filers got the clearest published timing measure
Free toolDS-160 Form Filling Online Helper ToolThe agency said the $5.6 trillion in collections was its highest total, up nearly 5 percent from the prior year. It described those receipts as providing most of the revenue that funds U.S. government operations.
Figures in March and April testimony offer snapshots from the filing season, rather than another annual comparison. In March, Bisignano told the House Ways and Means Committee that the average Schedule 1-A refund increase was $775. The IRS analytics group projected it would reach $1,000 by the end of the season.
He said direct-deposit refunds were arriving nine days on average after filing. He compared that with the previous 21-day standard for electronically filed returns. Mailed returns had taken over six weeks, while complex or amended returns could take up to 16 weeks.
At the time of the March testimony, 43 percent of returns filed had claimed at least one new tax cut: no tax on tips, overtime, Social Security or auto-loan interest for cars made in America. Seniors received the largest dollar benefit, Bisignano said. Taxpayers earning less than $100,000 saw the largest percentage increase in refunds.
The filing season began on January 26. In written testimony to the Senate Finance Committee dated April 15, 2026, Bisignano said the agency had received approximately 120 million individual returns through April 10. It had issued about 80 million refunds worth approximately $274 billion. More than 45% of filers had used one of the new deductions.
Online accounts and tools recorded heavy use
Taxpayers used the agency’s digital services in large numbers. The release reported these measures:
| Service or activity | Reported fiscal 2026 use |
|---|---|
| IRS.gov visits | More than 954 million |
| “Where’s My Refund?” checks | Nearly 469 million |
| Individual Online Account users | Approximately 37.6 million, up 34% |
| Individual account logins | 224 million |
| Payments through IRS Online Accounts | More than $133.6 billion, up 57% |
| Tax Professional Account users | 513 thousand, up 57% |
| Business Tax Account payments | $726.6 million, up nearly 250% |
The agency also launched a mobile app. More than 140,000 customers downloaded it during the first five days. Over two-thirds selected the authenticated personalized experience.
Direct deposits and electronic processing cut paper handling
The agency issued 12 percent more refunds by direct deposit than in the previous year. It tied that shift to Executive Order 14247, which calls for eliminating paper checks to cut administrative costs, speed payment processing and protect against refund fraud.
Under its Zero Paper initiative, the agency converts physical returns into digital data and seeks to reduce paper filings. More than 90 percent of Form 940 returns and more than 80 percent of Form 941 returns were processed electronically.
Paper checks are being phased out. Mailed refunds may take six weeks or longer to arrive.
Average rates declined and fraud protections preserved revenue
For Tax Year 2025, filed in 2026, average federal income tax rates declined across all income categories, based on returns filed through mid-July. The overall average rate was 12.6 percent, down 4 percent from 2025.
The agency also said it protected approximately $38 billion in tax revenue from identity-theft refund fraud during the fiscal year.
Adoption-credit adjustments will continue through year-end
A separate refund effort covers adoption-credit carryforwards. On Oct. 16, 2026, the agency said it had begun issuing refunds to more than 50,000 taxpayers and expected to complete the process for most eligible people by the end of the year.
For 2025, the adoption credit is worth up to $17,280 per child. Up to $5,000 can be refundable. Before the change, the credit could not produce a refund, though unused amounts could be carried forward for up to five years.
For tax year 2025 only, carryforwards from 2020 through 2024 can increase the refundable portion, up to $5,000 per qualifying child. Amounts carried forward from before 2020 have expired. Adjustments began in September 2026.
People who filed their 2025 returns before April 15, 2026, should automatically receive any adjustment due. Returns filed under extension and accounts involving identity-theft indicators, freezes or dependency conflicts will be reviewed later in the year.
The agency generally sends a notice within 30 days of an adjustment. It explains the amount and whether the money produced a refund or went toward another debt. “Where’s My Refund?” will not display this payment; taxpayers can check the notice, an IRS Online Account or a tax transcript.
The agency advises against filing an amended return just to request the adjustment. If a qualifying carryforward was left off the 2025 return, Form 1040-X with Form 8839 may be needed. For 2025, the credit starts to shrink above modified adjusted gross income of $259,190 and is eliminated at $299,190, although a 2024 carryforward can still allow a claim above that threshold.
The agency issued proposed regulations on Oct. 14, 2026, to implement changes to the Premium Tax Credit, which helps eligible taxpayers afford insurance purchased through Health Insurance Exchanges. Treasury and the agency issued proposed rules on Oct. 1, 2026, for the Federal Scholarship Tax Credit under section 25F, also called the Education Freedom Tax Credit. It supports private contributions for K-12 scholarships.
Most eligible adoption-credit adjustments are expected to be completed by the end of 2026.
This article is for informational purposes only and does not constitute tax advice. Consult a qualified tax professional or CPA about your specific situation.
