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4d ago

IRS Opens 2026 Filing Season With Bigger Refunds Under New Tax Law

Refunds are projected to be about $1,000 larger as retroactive 2025 tax changes were not reflected in last year’s withholding.

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Detroit residents Cynthia Able, left, 65, and Tiffany Thomas, 54, speak after talking about how they benefitted from being in a tax preparation program. They were attending a press conference at The Ford Community Center — East in Detroit on Tuesday, January 20, 2026. The event announced a campaign for free tax preparation for Detroit residents earning under $69,000, with the goal of helping them maximize federal and state tax credits.
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Overview

  • Processing began January 26 for 2025 returns, with the IRS expecting about 164 million filings and most electronic refunds issued in roughly three weeks if there are no issues.
  • Expanded provisions from the One Big Beautiful Bill Act include a higher $40,000 SALT cap, new deductions for certain tips and overtime, a $6,000 senior deduction, and a maximum child tax credit of $2,200.
  • Taxpayers claiming the new senior, tip, or overtime deductions must use the new Schedule 1‑A form when filing this season.
  • Direct deposit is strongly encouraged as the IRS has largely phased out paper refund checks, and EITC or ACTC filers should expect refunds no earlier than March 2.
  • Other changes include the 1099‑K threshold reverting to over $20,000 and more than 200 transactions, and updated 2026 withholding tables so paychecks this year better reflect the new law, even as observers warn of possible service strain.