Tax season has officially begun, with the filing period starting on January 26. Many taxpayers are eagerly anticipating their refunds, especially in light of the White House’s announcement that Americans may see an average increase of $1,000 in their tax refunds this year.
For those who have paid more taxes throughout the year than they owe, refunds are expected. Additionally, many filers may still qualify for significant refunds based on credits such as the Earned Income Tax Credit (EITC), Child Tax Credit (CTC), or Additional Child Tax Credit (ACTC).
Taxpayers who file electronically can expect to receive their refunds within the traditional timeframe of 21 days or fewer. However, those filing paper returns or requesting corrections can anticipate a longer wait, potentially exceeding four weeks. Although the IRS is phasing out paper refunds, checks will still be issued if no alternative payment options are available.
The IRS has highlighted that it anticipates the majority of refunds associated with the EITC and ACTC will appear in bank accounts or on debit cards by March 2. However, delays may occur for some filers due to staff shortages after a significant reduction in the workforce during the previous administration, as noted by National Taxpayer Advocate Erin Collins in her recent report to Congress. Despite this, the report reassures that most taxpayers should be able to file their taxes and receive their refunds without significant issues.
The expected increase in average tax refunds this year is attributed in part to the One Big Beautiful Bill Act, which continues the tax cuts initiated by President Trump in 2017. Last year, the average refund was reported to be $3,167. A key change in this bill is the adjustment to the standard deduction, which affects a large portion of taxpayers. The standard deduction for single filers has been raised to $15,750, up from $15,000, while married couples will see their standard deduction increase to $31,500 from $30,000. Additionally, seniors over the age of 65 are now eligible for an additional $6,000 standard deduction bonus.
The White House also asserted that a significant portion of senior citizens—88% of those receiving Social Security—will not owe taxes on those benefits, according to the Council of Economic Advisers. Furthermore, the Child Tax Credit has been permanently boosted to $2,200 per child, increasing savings for qualified families by $200 compared to the previous $2,000 credit.
For families whose Child Tax Credit exceeds their tax obligations, the Additional Child Tax Credit is available, allowing claims of up to $1,700 per child. Many lower-income filers may find that they do not owe any taxes, making these credits especially beneficial.
Taxpayers can easily verify their eligibility for the Earned Income Tax Credit, designed for low- to moderate-income working families, by visiting the IRS website. This credit can be worth up to $7,830, depending on factors such as filing status, income, and number of children.
To stay informed about the status of their refunds, filers can utilize the IRS online tool titled “Where’s My Refund?” to track their returns.
