In a highly anticipated move, the IRS has revealed significant changes for tax year 2026, which will directly impact the size of refunds for millions of Americans. The new rules, which will apply when filing taxes in 2027, include larger standard deductions, expanded tax credits, and new incentives aimed at low-income workers, seniors, and families with children. These changes may mean bigger tax refunds for eligible taxpayers.
IRS Reveals 2026 Tax Refund Changes
| Key Fact | Detail |
|---|---|
| Standard Deduction | For 2026, the standard deduction increases to $16,100 (single) and $32,200 (married couples). |
| Earned Income Tax Credit (EITC) | Maximum EITC rises to $8,231 for taxpayers with three or more children. |
| Senior Tax Deductions | Additional $2,050 deduction for single seniors, $1,650 for married seniors. |
| Child Tax Credit | The Child Tax Credit increases to $3,600 for children under 6 years old. |
The IRS’s tax changes for 2026 present an opportunity for many taxpayers to see larger refunds or lower tax liabilities. These changes—ranging from higher standard deductions to expanded tax credits for low-income families and seniors—are designed to ease the financial burden on taxpayers.
As the tax season approaches, individuals should review their withholding and consult with a tax advisor to make sure they are getting the most out of these new provisions.
Key Changes to Tax Refunds for 2026
Larger Standard Deductions and Tax Relief
The IRS has raised the standard deduction for 2026, a move that will lower taxable income for most taxpayers. This increase is particularly beneficial for those who do not itemize their deductions. For single filers, the standard deduction will rise to $16,100. Married couples filing jointly will benefit from a $32,200 standard deduction, while heads of household will see a standard deduction of $24,150.
This means that taxpayers will pay taxes on less income, potentially resulting in a larger refund or smaller tax bill. These changes help offset the effects of inflation, which have increased the cost of living.
Expanded Credits for Working Families and Low-Income Taxpayers
The Earned Income Tax Credit (EITC), designed to assist low- and moderate-income workers, will see a significant increase. For 2026, the maximum EITC for taxpayers with three or more children will be $8,231, up from the previous year’s limit of $6,660.
This refundable credit means that taxpayers with low or no tax liability can still receive the full amount as a refund. In practice, this means that working families with children could see thousands of dollars in additional tax refunds, especially when paired with the increased standard deduction.
Tax Relief for Seniors
Under the newly enacted One Big Beautiful Bill (OBBB), seniors aged 65 and older will receive additional tax relief. For single seniors, the additional deduction will be $2,050, while married seniors will get $1,650. This provides an opportunity for seniors to reduce their taxable income, leading to potentially higher refunds or lower tax bills.
Additionally, the new law introduces a bonus senior deduction of up to $6,000 for those over 65, available even if they do not itemize their deductions.
Changes to the Child Tax Credit (CTC)
For families with young children, the Child Tax Credit will be enhanced. Parents of children under the age of 6 will receive an increase in their CTC to $3,600 per child. This increase will help families with younger children offset the rising costs of childcare and everyday expenses.
Examples of How Refunds Could Be Bigger in 2026
Scenario 1: Single Taxpayer with No Children
For a single taxpayer who does not itemize deductions, the new standard deduction of $16,100 means that they will pay taxes on less income. If this taxpayer earns $40,000 in 2026, their taxable income would drop to $23,900 (after applying the standard deduction).
This could lead to a significant reduction in the amount of taxes owed, and depending on their withholding, this could result in a larger tax refund.
Scenario 2: Married Couple with Two Children
Consider a married couple with two children under 6 years old. The Child Tax Credit of $3,600 per child will add $7,200 to their refund. In addition, the increase in the standard deduction to $32,200 will help reduce their taxable income.
For example, if they have a taxable income of $75,000, the new deductions and credits could result in a much larger refund than in previous years.
Scenario 3: Senior Taxpayer
For a single senior earning $30,000 in 2026, the new senior deduction of $2,050 would reduce their taxable income to $27,950, lowering their tax liability. Additionally, if they qualify for the senior bonus deduction of up to $6,000, it will further reduce their taxable income, leading to a potentially larger refund.
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What Taxpayers Should Do Now
Update Your Withholding
To take full advantage of the 2026 tax changes, taxpayers should update their withholding for 2026, ensuring they are not over‑or under‑withholding throughout the year. The IRS provides a Tax Withholding Estimator to help individuals adjust their withholding so that they don’t end up with an unpleasant surprise at tax time.
Claim All Available Credits
Taxpayers should ensure they are claiming all credits they are eligible for, including the EITC and Child Tax Credit, as these can significantly boost their refund. For seniors, the additional standard deductions and bonus senior deductions should be applied to maximize refunds.
Consult with a Tax Professional
If you have a complex tax situation, such as being self‑employed or having multiple sources of income, it’s wise to consult with a tax professional to ensure you are maximizing your refund under the new rules.
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