By Rachel Wolf – FOXBusiness

Treasury Secretary Scott Bessent predicted that Americans will see “gigantic” refund checks in the upcoming filing season, thanks to tax cuts in President Donald Trump’s One Big Beautiful Bill Act (OBBBA).

Bessent, who also serves as the acting commissioner of the IRS, made the remark during an appearance on the “All-In Podcast.” The treasury secretary told the hosts that the tax provisions in the act, which Trump signed in July, applied retroactively to the beginning of the year, and because most workers did not change their withholdings, many can expect sizable refunds 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 told the “All-In Podcast” hosts. “I think households could see, depending on the number of workers, $1,000- $2,000 refunds.”

Bessent’s prediction echoes that of the Tax Foundation, a nonpartisan tax policy nonprofit. The group said in a Dec. 17 report that “refunds will be larger than typical in the upcoming filing season because of the One Big Beautiful Bill Act’s (OBBBA) tax cuts for 2025.”

The foundation reported its estimate that the OBBBA reduced individual taxes by $144 billion for 2025, adding that outside estimates suggest that up to $100 billion of that could go to higher tax refunds for Americans. While not everyone will see a massive jump in their refunds, the Tax Foundation said that the savings from the OBBBA could push average refunds up by up to $1,000.

“But because the IRS did not adjust withholding tables after the law passed, workers generally continued to withhold more taxes from their paychecks than the new law required. 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 Tax Foundation wrote.

The Tax Foundation lists seven major tax cuts that took effect under the OBBBA that could contribute to higher refunds, including increases to the child tax credit and standard deduction, a higher SALT deduction cap, and new or expanded deductions for seniors, auto loan interest, tip income and overtime pay.

IRS reveals 2026 tax adjustments with changes from ‘big, beautiful bill’

The Internal Revenue Service (IRS) on Thursday announced annual inflation adjustments for dozens of tax provisions, along with changes made under the One Big Beautiful Bill Act (OBBBA).

The IRS’ announced changes primarily apply to tax year 2026.

The standard deduction, claimed by the majority of taxpayers who don’t itemize their returns, will rise to $16,100 for single taxpayers and $32,200 for married couples filing jointly in tax year 2026. OBBBA also raised the standard deduction for the 2025 tax year to $15,750 for single filers and $31,500 for couples filing jointly.

Adjustments were made to the IRS’ marginal tax brackets, with the income thresholds that apply to various tax rates updated to account for inflation.

The top tax rate remains at 37% for the 2026 tax year and applies to single taxpayers with incomes over $640,600 or married joint filers earning over $768,700. The other tax brackets and rates apply as follows:

• 35% for incomes over $256,225 for individuals and $512,450 for married filers;
• 32% for incomes over $201,775 for individuals and $403,550 for married filers;
• 24% for incomes over $105,700 for individuals and $211,400 for married filers;
• 22% for incomes over $50,400 for individuals and $100,800 for married filers;
• 12% for incomes over $12,400 for individuals and $24,800 for married filers;
• 10% for incomes of $12,400 or less for individuals or $24,800 for married filers.

Other notable changes made under the OBBBA include the estate tax exclusion, which will be set at $15 million for the estates of decedents who die in 2026. That’s an increase from the $13.99 million exclusion that applies in 2025.

Adoption credits will increase to $17,670 in tax year 2026, up from $17,280 in 2025, while the amount of the credit that’s refundable will be $5,120.

The exemption amount for the alternative minimum tax will be set at $90,100 and begin to phase out at $500,000 for individuals, or for married couples at $140,200 with a phase out starting at $1 million.

Additionally, the OBBBA increased the maximum amount of the employer-provided childcare tax credit from $150,000 to $500,000 (or $600,000 if the employer is an eligible small business).

Other tax provisions that are changing due to the annual indexing process include the earned income tax credit, which will rise to a maximum credit amount of $8,231 for qualifying taxpayers with three or more children, an increase from $8,046 in tax year 2025.

The limitation for voluntary employee salary reductions for contributions to health flexible spending arrangements will increase to $3,400 in tax year 2026, up $100 from last year. Cafeteria plans that allow unused amounts to carryover would have the maximum carryover at $680, up $20 from 2025.

Taxpayers who have self-only coverage in a medical savings account would have to have a deductible of at least $2,900 in tax year 2026, up $50 from this year, but not more than $4,400, which is an increase of $100 from this year. The maximum out-of-pocket expense amount for self-only coverage will increase $150 to $5,850 in 2026.

For family coverage with medical savings accounts, the annual deductible will be between $5,850 to $8,750, while the out-of-pocket expense limit will be $10,700 in tax year 2026.

The monthly limitation for the qualified transportation fringe benefit will rise $15 to $340 in tax year 2026.

The annual exclusion for gifts will be unchanged for tax year 2026 at $19,000. Some tax provisions that in the past were indexed for inflation are no longer adjusted. Those include personal exemptions, itemized deductions, and the income measurement used to phase out the lifetime learning credit.