OAN Staff Brooke Mallory
1:20 PM – Thursday, January 29, 2025
As the 2026 tax filing window swings open, the Trump administration is projecting a historic windfall for American taxpayers. White House officials announced this week that millions of households are expected to receive significantly larger checks this year, fueled by the provisions of the Working Families Tax Cuts Act.
The GOP administration’s projections suggest that average refunds could rise by $1,000 or more compared to previous years.
Treasury Secretary Scott Bessent characterized the upcoming months as the “biggest tax refund season ever,” attributing the surge to a suite of “transformative policies” designed to provide direct relief to middle- and working-class families.
The Working Families Tax Cuts Act, signed into law on July 4, 2025, introduced several landmark shifts in the federal tax code that are now hitting taxpayers’ bottom lines for the first time.
Key provisions include:
- Tax-free tips and overtime: A cornerstone of President Trump’s economic platform, these provisions allow service workers and hourly employees to keep 100% of their earnings from tips and extra hours worked, retroactively applying to portions of the 2025 tax year.
- Enhanced child tax credit: The legislation increased the Child Tax Credit to $2,200 per child.
- “Made in America” auto deduction: For the first time, taxpayers can deduct interest payments on auto loans, up to $10,000, specifically for vehicles manufactured in the United States.
- Senior support: A new $6,000 bonus deduction for seniors on Social Security aims to eliminate federal income tax for approximately 88% of retirees.
Independent financial analysts and major institutions have echoed the administration’s optimistic outlook. According to a study by Piper Sandler, average refunds are expected to climb by roughly $1,000, while the Tax Foundation estimates the average refund will grow from approximately $3,052 last year to $3,800.
The Trump administration estimates the total injection of capital into the economy could reach $100 billion in refunds this year.
“Treasury is opening the books for the American people,” Bessent said. “Starting with the historic Working Families Tax Cuts, we want Americans to see exactly how the President’s policies will strengthen small businesses, allow workers to keep more of their hard-earned money and spur economic growth as we head into this historic anniversary of our great nation.”
Despite the administration’s celebration of the projected refunds, the legislation remains a flashpoint on Capitol Hill. The Trump White House noted that the Act passed with a strictly partisan vote, highlighting that every Democrat in Congress had opposed the measure.
Democrat leadership has previously criticized the bill, arguing that the long-term cost to the federal deficit outweighs the immediate refund gains and questioning the distribution of benefits.
Conversely, House Ways and Means Committee Chairman Jason Smith (R-Mo.) defended the bill, stating it prevents “the largest tax hike in history” that would have occurred had previous tax cuts been allowed to expire.
The IRS officially began accepting 2025 tax returns on January 26, 2026. Officials are encouraging taxpayers to use the new Schedule 1-A to claim the specific deductions for tips, overtime, and American-made vehicle interest. Most taxpayers can expect their refunds within 21 days if they file electronically and choose direct deposit.
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