As the federal tax filing deadline moves closer, the U.S. government is drawing attention to major changes that could affect how much Americans owe and how large their tax refunds may be in 2026. According to recent updates, the current tax season reflects a shift in policy that officials say is designed to put more money back into the hands of working families.

Treasury Signals Larger Refunds for Millions

The U.S. Treasury Department announced that tax filing season officially opened on January 26 and claimed that new tax changes are expected to deliver higher refunds for many households. In a public message, the department stated that President Donald Trump’s Working Families Tax Cuts are set to increase refunds by an average of $1,000 per household. Officials estimate that more than 100 million households may receive a refund this year.

Key Tax Changes Affecting Refund Amounts

Several updates are contributing to these higher refund projections. The child tax credit for tax year 2025 increased to $2,200 and was adjusted for inflation. For families with two children, the average tax cut is expected to be around $1,700. In addition, the standard deduction has been doubled, a change that impacts roughly 90 percent of taxpayers and reduces the amount of income subject to federal tax.

The Treasury Department also highlighted changes related to tips, overtime, and certain auto loan interest deductions. These provisions may reduce taxable income for some workers, particularly those in service or hourly roles, though the exact benefit depends on individual earnings and limits set within the tax code.

Clarifying Claims About “No Tax” Messaging

Despite bold messaging, some experts caution that the changes are being misunderstood. Kevin Thompson, CEO of 9i Capital Group, explained in comments to Newsweek that while refunds are likely to be higher, claims such as “no tax on Social Security” are inaccurate. Social Security benefits remain taxable under current law, depending on income thresholds.

Other financial experts echoed this concern, noting that many of the advertised “no tax” provisions include caps, phase-outs, or income limits. While these changes can still help taxpayers, they are not unlimited exemptions.

New Accounts for Children and Long-Term Impact

Another change allows families with children under 18 to open special accounts for their children, with a $1,000 contribution from the Treasury for eligible births between 2025 and 2028. These funds are intended for long-term use when the child becomes an adult.

While higher refunds may increase spending power in the short term, some analysts warn about long-term consequences. Reduced tax revenue combined with high government spending could increase federal deficits, raising broader economic concerns.

What Taxpayers Should Keep in Mind

Higher refunds can be helpful, but experts remind taxpayers that a refund is simply money that was overpaid during the year. Planning based on realistic expectations, rather than headlines, is essential for avoiding disappointment.

Disclaimer: This article is for informational purposes only and does not provide legal, tax, or financial advice. Tax laws, refund amounts, and eligibility rules may change. Readers should consult official IRS or Treasury Department resources, or a qualified tax professional, for guidance specific to their situation.