President Donald Trump says Americans could receive record-setting tax refunds in the coming filing season, pointing to the recent passage of the One Big Beautiful Bill Act (OBBBA) as the driving force behind what he predicts will be an unprecedented payout.
During a Cabinet meeting this week, Trump said the legislation (which extends tax cuts originally passed in his first term and packages in new reforms and spending) will result in larger refunds for millions of taxpayers.
“Next year’s projected to be the largest tax refund season ever,” Trump said.
Treasury Secretary Highlights Retroactive Benefits
Treasury Secretary Scott Bessent echoed the optimism, suggesting that several OBBBA provisions retroactive to 2025 will provide meaningful financial relief.
“The best is yet to come,” Bessent said, noting that “in 2026 we are going to see very substantial tax refunds in the first quarter.”
Among the measures he highlighted were tax breaks for Social Security recipients, workers who rely on tips and overtime, and deductions for auto loans applied to U.S.-manufactured vehicles. According to Bessent, these changes will help ease cost-of-living pressures.
Trump Pushes Forward With Tariff Dividend Plan
Trump again promoted his proposal to distribute “tariff dividends” to Americans, saying revenue collected from tariffs would eventually be returned to taxpayers and used to shrink the national debt.
“We’re going to be giving back refunds out of the tariffs because we’ve taken in literally trillions of dollars,” Trump said, adding that tariff revenues could someday make income taxes optional or significantly reduced.
The president has previously floated issuing $2,000 annual tariff dividends to low- and middle-income Americans. Such payments would require congressional approval, and the administration has discussed a possible rollout in mid-2026.
Budget Analysts Warn of Long-Term Debt Impact
While the White House says the plan will put more money back into Americans’ pockets, independent budget experts remain skeptical. The Committee for a Responsible Federal Budget (CRFB) estimates that a $2,000 annual tariff dividend structured similarly to pandemic-era stimulus checks would cost roughly $600 billion per year.
By comparison, the Trump administration’s tariffs are projected to raise about $300 billion annually – including tariffs currently under Supreme Court review. Net tariff revenue not affected by the legal challenge totals under $100 billion per year.
According to CRFB analysis, delivering $2,000 dividends annually for a decade would increase the national debt by roughly $6 trillion – twice what the tariffs are expected to generate over the same period.
Tariffs Remain Small Share of Federal Revenue
Although the administration has leaned heavily on tariff revenue to justify the dividend plan, customs duties make up only a small percentage of federal income.
In fiscal year 2025, individual income taxes accounted for more than $2.6 trillion in revenue, payroll taxes added $1.7 trillion, and corporate income taxes contributed $452 billion.
Customs duties, including tariffs, brought in just $195 billion, or 3.7 percent of total tax receipts, per FOX Business.
The administration maintains that the OBBBA will fuel wage growth, strengthen the economy, and ultimately improve affordability for American families. Whether the projected record refunds materialize will become clear when the 2026 filing season begins.