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Treasury Secretary Scott Bessent said Americans could see “gigantic” tax refunds in the next filing season as a result of tax cuts included in President Donald Trump’s One Big Beautiful Bill Act. Bessent made the comments during an appearance on the All In Podcast.
Bessent, who is also serving as acting commissioner of the Internal Revenue Service, said the tax provisions apply retroactively to the beginning of the year, Fox News reported. He said most workers did not adjust their tax withholdings after the law was signed. As a result, Bessent said many Americans could receive large refunds when they file their 2025 returns in 2026.
“I can see that we’re gonna have a gigantic refund year in the first quarter because working Americans did not change their withholdings,” Bessent said. “I think households could see, depending on the number of workers, $1,000 to $2,000 refunds.”
President Trump signed the One Big Beautiful Bill Act into law in July.
Bessent’s prediction aligns with an analysis released by the Tax Foundation. In a Dec. 17 report, the nonpartisan tax policy group said refunds are expected to be larger than usual because of the OBBBA’s tax cuts.
“Refunds will be larger than typical in the upcoming filing season because of the One Big Beautiful Bill Act’s tax cuts for 2025,” the foundation wrote.
The Tax Foundation estimated the law reduced individual taxes by $144 billion for 2025. It said outside estimates suggest as much as $100 billion of those savings could be returned to taxpayers through higher refunds.
The group noted that not all taxpayers will see large increases. However, it said the savings could raise average refunds by as much as $1,000. The Tax Foundation said the IRS did not update withholding tables after the law passed.
Because of that, workers continued to have more taxes withheld from their paychecks than required under the new law.
“As a result, instead of gradually receiving the benefit of the tax cuts through higher take home pay during the year, most taxpayers will receive it all at once when they file their returns,” the foundation said.
The Tax Foundation identified seven major tax cuts under the OBBBA that could contribute to higher refunds. Those include increases to the child tax credit and standard deduction. The law also raised the state and local tax deduction cap.
Additional provisions expanded or created deductions for seniors, auto loan interest, tip income, and overtime pay.
After Trump announced that members of the U.S. military will receive what he described as a “Warrior Dividend” during a nationwide address earlier this month, questions remain about whether the broader public will receive a proposed $2,000 tariff dividend.
Trump first raised the idea of a tariff-funded payment in a post on his Truth Social account in November. He said then that the dividend would be distributed to “everyone” except high-income earners.
Several days later, on Nov. 12, Bessent said the payments would be limited to families earning $100,000 or less. Since then, Trump has reiterated that the $2,000 payments are still planned, saying they would likely be distributed to eligible Americans “probably in the middle of next year.”
“We’re going to be issuing dividends later on, some somewhere prior to, probably in the middle of next year, a little bit later than that. Thousands of dollars for individuals of moderate income, middle income,” Trump said on Nov. 17, as reported by Axios.
“Any form of stimulus payment issued by the U.S. government would have to be approved by Congress,” the El Paso Times reported.
As the federal government continues to grapple with an enormous budget deficit, it’s not at all certain that even a GOP-controlled Congres will approve the payments.
