The Trump administration and Republicans on the House Committee on Ways and Means have claimed that because of the One Big Beautiful Bill Act, “average refunds [are] projected to rise by $1,000 or more this year.” Yet, according to the data cited by the White House and congressional Republicans, this is not true: Their sources show the average tax refund will actually increase by only $331 to $748.
Furthermore, like the Big Beautiful Bill (BBB) in general, the vast majority of refund dollars will go to high-income Americans. Fewer than half of American taxpayers making less than $100,000 will receive an increased tax refund this year, and their refund check will only be $208 larger than previously. Meanwhile, nearly all Americans making more than $200,000 will see an increased refund, and theirs will average over $2,000 more than last year.
Claims of massive 2025 tax refunds are not supported by the data
The sources cited by the White House and Republicans in Congress appear to directly contradict their claims that average refunds will rise by $1,000 or more this year. Some sources do not provide enough information to evaluate their claims, but among those with easily verifiable numbers, none say the average taxpayer’s refund will rise by $1,000:
- The Tax Foundation clearly shows that tax refunds will rise by an average of $748 this year—25 percent less than the $1,000 increase the White House is claiming.
- An Oxford Economics study says “total taxpayer savings could amount to an additional $50 billion through bigger tax refunds.” Per IRS data, however, there were 154 million tax returns filed in 2022. Simple division shows that the average tax refund would increase by $331 per taxpayer if the same number of people file this year. A $331 projected refund increase is only a third of the $1,000 the White House is claiming.
- A nonpublic analysis from investment firm Piper Sandler is described by House Ways and Means Republicans as showing “taxpayers are expected to take home an additional $91 billion in refunds.” Again, dividing by 154 million taxpayers shows that the average tax refund would increase by $591 per taxpayer if the same number of people file this year. This would be 41 percent less than the $1,000 increase congressional Republicans are claiming.
Furthermore, early refund data show that refunds are not on track to increase by $1,000 per taxpayer. So far, the IRS reports that tax refunds have increased by only $225 on average, or about 11 percent relative to this time last year. That increase is far from the 33 percent increase necessary to reach the $1,000 promise.
A $331 projected refund increase is only a third of the $1,000 the White House is claiming.
Even these average figures can be misleading and not reflective of what the median American household will experience. The BBB is set up to help mainly the rich, and the “average” refund will be heavily affected by the large refunds going to people at the top. New Center for American Progress analysis of data from the Urban-Brookings Tax Policy Center (TPC) on the distribution of tax refunds by income finds that refunds will increase by an average of $650, between the $591 figure from Piper Sandler and the $748 figure from the Tax Foundation and nearly twice Oxford Economics’ $331 projection. However, most American households have incomes lower than $100,000, and the BBB does little to raise these households’ after-tax income. Per TPC, those making less than $100,000 can expect a tax refund increase of only $210. Meanwhile households making more than $200,000 can expect refund increases of more than $2,000. (see Figure 1)
Increased tax refunds are concentrated among select groups of filers
“Average” refund figures can disguise the fact that many Americans will not see an increased refund at all. Getting a larger refund as a result of the BBB heavily depends on whether a taxpayer is part of one of the groups favored with tax cuts under the law, such as those earning qualified overtime pay or those who pay large amounts of state and local taxes. The Tax Foundation finds that the majority of increased tax refunds (55 percent) will go to just two small groups of people:
Fewer than half of American taxpayers making less than $100,000 will receive an increased tax refund this year.
As a result, fewer than half of American households making less than $100,000 (48.8 percent) will receive an increased refund this year, while nearly all Americans making more than $100,000 (93 percent) will receive an increased refund. (see Figure 2)
Tariffs and the expiration of health care tax credits dwarf the average tax refund
Focusing on tax refunds also ignores the impact of the Trump administration’s tariffs, the costs of which are nearly entirely borne by American consumers and importers. The tariffs are costing the average family between $1,250 and $1,750 annually, roughly two to three times the size of the average tax refund—$650. Notably, once the tax cuts in the BBB are reconciled with tariff costs, taxes increase on Americans of all income groups except the top 1 percent. Though the U.S. Supreme Court recently struck down many of these tariffs, observers note that the Trump administration is likely to use alternative legal pathways to reimpose the tariffs.
Finally, BBB tax refunds are not the only tax change hitting families’ pocketbooks early this year. Taxes are increasing for more than 22 million Americans because of the expiration of Affordable Care Act marketplace premium tax credits. Per the Joint Committee on Taxation, the failure to extend these tax credits is a $27 billion tax increase in 2026 that will primarily affect lower- and middle-class Americans. Lost premium tax credits will amount to $8.7 billion for Americans making less than $50,000, which erases the $4.8 billion this group can expect to receive in larger refunds.
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Conclusion
It is unfortunate that the White House and Republicans in Congress are misrepresenting the data on tax returns, and it is also important to consider the totality of the many ways the administration’s signature economic policies are increasing costs for families. Some Americans will receive larger tax returns this year, though those refunds will be smaller and less widespread than supporters claim. Unfortunately, the small effect of the tax refunds will be swamped by the negative effects of the administration’s other fiscal policies, such as increased tariffs and cuts to health insurance support.