Overview
- President Donald Trump’s One Big Beautiful Bill Act, signed in July, extended 2017 tax cuts and added retroactive 2025 breaks such as a higher SALT cap, a new senior deduction, and relief for tipped and overtime income.
- Because the IRS did not update 2025 withholding tables after the law passed, many workers have been over‑withheld and are expected to receive larger refunds or owe less next spring.
- Oxford Economics estimates about $9.3 billion in savings from the senior deduction and $5.1 billion from the expanded SALT break, with benefits disproportionately accruing to higher‑income households.
- The IRS issued $275 billion in refunds for 2024 returns with an average refund of $2,939, so an extra $50 billion would represent roughly an 18% increase.
- Economists expect only a modest boost to consumer spending from the refunds because wealthier households are likely to save much of the additional money.