Trump Administration Announces Major Tax Refunds for 2026: What You Need to Know
Claire Kertzmann
Published Dec 16, 2025
The Trump administration has announced that Americans can expect some of the largest tax refunds in history at the beginning of 2026.
According to Treasury Secretary Scott Bessent, the new "One Big Beautiful Bill Act" (OBBBA) could inject between $100 billion and $150 billion in tax refunds back into the economy.
Why Are Refunds So Large?
There are two main reasons for these larger-than-usual refunds:
- Retroactive Tax Breaks: The new law includes tax breaks—like zero taxes on tips and overtime pay—that apply to money earned in the previous year. This means workers who earned extra through tips and overtime will pay less taxes on that income.
- Unchanged Tax Withholding: Since the law was introduced mid-year, most workers didn’t have time to update their tax withholdings at work. This means they likely paid too much in taxes throughout the year and will get that extra money back when they file.
How Much Money Could You Get Back?
Most households are expected to receive refunds between $1,000 and $2,000. This extra money comes in addition to regular tax refunds thanks to the new deductions and policies.
In addition to these big refunds, the OBBBA has extended the 2017 tax cuts, so tax rates won't increase as previously planned in 2026.
Other Tax Changes in 2026
- Bigger Deductions for Families: The standard deduction—the amount you can subtract from your income before taxes—will get larger. For example, married couples filing jointly will be able to deduct up to $32,200 from their income.
- Special Income Deductions: Workers can now deduct up to $25,000 in tip and overtime income.
Benefits If You Want to Buy a Car in 2026
If you're planning to buy a car made in the USA in 2026, the new tax law brings an added bonus:
- Loan Interest Deduction: Buyers can now deduct up to $10,000 in interest paid on loans for certain U.S.-made cars. This deduction means you can subtract what you pay in car loan interest from your taxable income, possibly lowering your taxes and saving you money.
What Does This Mean for You?
If you buy a qualifying U.S.-made car in 2026 and finance it with a loan, the interest you pay could result in a smaller tax bill the following year.
Combined with the larger tax refund and other deductions, purchasing a new car could become much more affordable.
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