2026 Tax Season Update: The 2026 tax filing season is showing a clear pattern: average IRS refunds are higher than last year, while the overall pace of filing and processing is slower in the early weeks.
This update affects millions of taxpayers expecting refunds during the spring filing window. Larger refunds can provide short-term financial relief, but slower filing activity may impact when payments are received.
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Here’s a structured look at the latest IRS data and what it means for taxpayers in 2026.
Early 2026 Filing Season Snapshot
According to early-season data released by the Internal Revenue Service, refund amounts are up year-over-year, while total returns received and processed are slightly lower than at the same point in 2025.
Below is a comparison of early filing season data:
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| Metric | 2025 (Same Period) | 2026 (So Far) | Change |
|---|---|---|---|
| Returns Received | ~23.6 million | ~22.3 million | ↓ Lower |
| Returns Processed | ~23.5 million | ~20.6 million | ↓ Lower |
| Refunds Issued | ~8.05 million | ~7.40 million | ↓ Lower |
| Total Refund Amount | ~$16.6 billion | ~$16.9 billion | ↑ Slightly Higher |
| Average Refund | ~$2,065 | ~$2,290 | ↑ About 11% |
| E-Filed Returns | High majority | High majority | Stable |
| Direct Deposit Usage | Majority | Majority | Stable |
| Standard Filing Deadline | April 15 | April 15, 2026 | No change |
While fewer refunds have been issued so far, the total dollar amount refunded is slightly higher — pushing the average refund up by roughly 10–11% compared with last year.
Why Refunds Are Bigger in 2026
Several factors may be contributing to higher average refund amounts:
- Tax law adjustments affecting 2025 income returns
- A higher standard deduction
- Increased eligibility for certain refundable credits
- Withholding levels that exceeded actual tax liability
- Timing differences in early filers compared to last year
It’s important to note that refund averages fluctuate throughout the season. Early filers often differ financially from later filers, which can influence early averages.
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Slower Filing Activity Explained
Despite larger refunds, the IRS reports that fewer returns have been submitted and processed compared with the same point last year.
Possible explanations include:
- More taxpayers filing closer to the April deadline
- Delays in gathering tax documents
- Increased complexity in returns (self-employment, investments, credits)
- Verification reviews for fraud prevention
- Seasonal timing differences in when IRS began accepting returns
A slower start does not necessarily indicate lower total filings for the year. Historically, filing activity accelerates in March and early April.
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Processing Timelines in 2026
For most taxpayers:
- E-filed returns with direct deposit are typically processed within about 21 days
- Paper returns take significantly longer
- Returns claiming certain refundable credits may be held for review
- Identity verification checks can extend refund timelines
The IRS continues to emphasize electronic filing and direct deposit as the fastest refund options.
What This Means for Taxpayers
The combination of larger refunds and slower processing can create mixed expectations.
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Here’s what taxpayers should consider:
- A larger refund often means over-withholding during the year
- Adjusting Form W-4 may help align withholding more accurately
- Filing early can reduce stress, but accuracy is more important than speed
- Monitoring refund status through official IRS tools is recommended
- Planning for possible delays is wise if claiming refundable credits
For households depending on refunds for bills or savings, timing remains a key factor.
Economic Impact of Larger Refunds
Higher average refunds can have broader financial effects:
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- Increased consumer spending in early spring
- More funds directed toward savings or debt reduction
- Greater short-term liquidity for lower-income households
- Potential adjustments in withholding strategies later in 2026
However, tax experts often note that a refund is not “extra money” — it represents tax overpayments returned to the taxpayer.
Frequently Asked Questions
1. Why is the average refund higher this year?
Refunds are up roughly 10–11% compared with early 2025 data, likely due to tax adjustments, deductions, and timing of filings.
2. Does slower filing mean fewer people are filing?
Not necessarily. Filing volume often increases as the deadline approaches.
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3. When is the 2026 tax filing deadline?
The standard federal deadline is April 15, 2026, unless extensions apply.
4. How long does it take to receive a refund?
Most electronically filed returns with direct deposit are processed within about 21 days, barring reviews or errors.
5. Why would my refund be delayed?
Common reasons include errors, missing information, identity verification, or claims for certain refundable credits.
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6. Should I adjust my withholding if I received a large refund?
Possibly. If your refund is large, you may want to review your withholding to better match your expected tax liability.
Conclusion
The 2026 tax season is currently marked by bigger average refunds but slower early filing activity. While fewer returns have been processed so far compared with last year, the average refund amount has increased by around 11%.
As the season progresses toward the April deadline, filing volume is expected to rise. Taxpayers should focus on accuracy, monitor refund status, and consider how refund amounts align with their overall financial planning.
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Dr Linda Steele is a Senior Lecturer at the Faculty of Law, University of Technology Sydney, and a member of the Law Health Justice Research Centre. She is also a Visiting Senior Fellow at the Faculty of Law, Humanities and the Arts, University of Wollongong.