Millions of Americans Receiving an Added $1,000 Refund From IRS

Tax season is in full swing, and the deadline is April 15, meaning that taxpayers have until that date to file their 2025 tax returns and pay tax due.

The good news is that millions of Americans are projected to get a larger tax return this year. According to research from the nonpartisan Tax Foundation, the average American's tax refund in 2026 is expected to be $300 to $1,000 higher than usual, due to tax law changes that bring down select taxpayers' liability as paycheck withholding wasn't fully changed.

American Getting Up to $1,000 More This Year From the IRS

So, you could be looking at an extra $1,000 this year. Refunds will be larger than normal in the current tax filing season, the Tax Foundation notes in a January 2026 report, because of 2025 tax cuts.

They add that "refunds will undoubtedly rise for millions of taxpayers under the OBBBA, reflecting the law's reduction in individual tax burdens, but simply putting more cash into people’s pockets is not why the tax law is expected to boost long-run economic growth."

A handful of the changes that will give Americans back some cash this year include the maximum child tax credit increasing $200; a standard deduction increase of $750 for single filers and $1,500 for joint filers; and a new $6,000 additional deduction for seniors that begins phasing out when taxpayers make more than $75,000 or $150,000 joint.

Financial Experts Give Suggestions for What to Do With Your Tax Refund

So, if you're one of the Americans who gets a $1,000 tax refund, what should you do with it? Financial experts say to use it wisely.

Securian Financial says the first thing to do is to pay off credit card debt. "With the average credit card interest rate of nearly 26 percent, keeping a balance on a card could cost you a lot," they note. They also suggest to add to your emergency funds, stating, "Having funds available for emergencies is important to our overall financial well-being."

A report from Crews Bank & Trust states to use the money to invest in the future. "Whether you have a Roth, traditional IRA, or 401(k), use your extra funds to augment your retirement account for when you’re no longer on the job," they note. "Once you're at that point, you will be grateful that you chose to make the long-term investment toward retirement rather than spending it on something you will have forgotten about."

Finally, the experts at the Consumer Financial Protection Bureau urge Americans to save at least part of their tax returns. They also suggest planning ahead for what to do with that return, stating, "Planning ahead can help you to take advantage of tax time to make the most of your tax refund."