Tax Refunds Under President Trump's One Big Beautiful Bill: A Mixed Picture

In early 2026, the White House projected that tax refunds would increase significantly, with expectations of an average boost of “$1,000 or more” compared to 2025. This optimism stemmed from provisions in President Donald Trump’s One Big Beautiful Bill, which included no taxes on tips, overtime, or Social Security. However, recent data from the Internal Revenue Service (IRS) indicates a more modest reality. As of late March 2026, the average tax refund was only $351 higher than the previous year, with fewer than half of taxpayers earning less than $100,000 expected to see substantial increases.

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The Center for American Progress reported that individuals earning less than $20,000 would see an average increase of just $13, while those earning between $20,000 and $50,000 would receive an average of $89 more. In contrast, taxpayers earning over $200,000 are projected to receive an average increase of over $2,000. This disparity raises concerns about the equitable distribution of tax benefits under the new legislation.

The Independent

The IRS has faced significant staffing challenges, losing approximately 27% of its workforce since Trump took office. This reduction has raised alarms about the agency's ability to manage complex tax obligations, particularly for those who file later in the season. Experts warn that the staffing cuts, combined with the introduction of complex tax law changes, may hinder the IRS's effectiveness in serving taxpayers. Representative Richard Neal criticized the current state of the IRS, stating that it is “simply outgunned” by wealthy individuals who can employ sophisticated tax avoidance strategies.

Boston Globe

IRS officials have reported that 80% of federal refunds have been issued promptly, with an average refund amount of $3,571, up about $400 from the previous year. However, the agency's leadership has been criticized for lacking stability, as it currently operates without a confirmed commissioner. IRS chief executive Frank Bisignano has acknowledged the challenges but emphasized that the tax season is progressing well, attributing some success to the adoption of artificial intelligence to compensate for workforce reductions.

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Critics argue that while the One Big Beautiful Bill aimed to simplify tax burdens, the actual implementation has led to confusion and inadequate support for lower-income taxpayers. Doreen Greenwald, president of the National Treasury Employees Union, highlighted the disconnect between public perception and the reality of the tax changes, asserting that IRS employees are struggling to explain the complexities of the new tax code to taxpayers.

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While the IRS has managed to navigate the initial filing season without major disruptions, experts caution that the long-term effects of staffing cuts and funding reductions could manifest in future audit outcomes and taxpayer service quality. Daniel Werfel, a former IRS commissioner, warned that the impact of these changes may not be immediately apparent but could lead to significant challenges in the coming years.

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• “The chances now of wealthy people being audited, it’s simply almost nonexistent,” — Representative Richard Neal

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• “The results from the audits that are being done this year — if they’re less effective, [have a] smaller footprint, [are] returning less money — we won’t see those for a few years,” — Daniel Werfel

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In summary, while the One Big Beautiful Bill was designed to enhance tax refunds for everyday Americans, the actual outcomes reveal significant disparities, particularly affecting lower-income taxpayers, amidst ongoing operational challenges at the IRS.

The Independent