IRS Tax Season 2026: Bigger Refund Checks, Fewer Returns and EITC Delays Explained

IRS Tax Refunds Rise in 2026: The 2026 tax filing season has opened with a complicated mix of encouraging and concerning signals. Early data from the Internal Revenue Service (IRS) shows that average tax refunds are higher than last year. At the same time, fewer Americans have filed returns so far, processing activity is down sharply, and operational pressures inside the agency are drawing scrutiny. 

Add to that mandatory refund holds for certain tax credits, the phase-out of paper checks, website outages during peak traffic, and uncertainty around broader policy proposals — and taxpayers are navigating one of the most closely watched filing seasons in years.

Here is a complete breakdown of what the numbers show, what has changed, and what taxpayers should expect before the April 15, 2026 deadline.

Key IRS Tax Season 2026 Highlights: Refund Growth, Filing Declines and Delay Risks

• Filing season opened January 26, 2026.
  
• April 15, 2026 is the federal tax filing deadline.
  
• The IRS expects approximately 164 million individual returns for tax year 2025.
  
• 22,351,000 returns received as of February 6, 2026 (down 5.2% from 23,589,000 last year).
  
• 20,623,000 returns processed (down 12.3% from 23,515,000 last year).
  
• 7,403,000 refunds issued so far, compared with 8,054,000 at the same point in 2025.
  
• Average refund: $2,290 (up from $2,065 last year — a 10.9% increase).
  
• Average direct deposit refund: $2,388 (up from $2,165).
  
• Nearly 99% of returns filed so far were e-filed.
  
• IRS workforce reduced by approximately 27%.
  
• Nearly 590,000 amended returns backlogged.
  
• EITC and ACTC refunds are legally delayed until mid-February.
  

Filing Activity Slows at the Start of Tax Season

As of February 6, 2026, the IRS had received 22.35 million individual income tax returns, compared with 23.58 million at the same time last year — a 5.2% decline.

More concerning is the processing slowdown. Only 20.62 million returns had been processed, compared to 23.51 million last year — a 12.3% drop.

Early filers typically submit simpler returns — standard deduction claims supported by Forms W-2. These returns usually move through IRS systems quickly. A slower pace this early in the season has prompted questions about whether deeper processing bottlenecks could develop when more complex filings arrive later.

Adding to concerns, some required tax forms were not immediately available at the start of the season. Tax professionals reported missing forms or draft versions still listed on the IRS website, including certain depreciation forms and updated estimated tax payment documents. Delays in finalizing forms may have contributed to slower filing and processing activity.

Refunds Are Higher in 2026

Despite slower filings, refunds are trending upward.

The average tax refund stands at $2,290 as of February 6, 2026 — a 10.9% increase from $2,065 during the same period last year.

For taxpayers receiving refunds through direct deposit, the average payment is $2,388, up from $2,165.

However, the total number of refunds issued is lower. The IRS has issued 7,403,000 refunds so far, compared to 8,054,000 at the same time in 2025. That gap reinforces concerns from taxpayers on social media reporting slower-than-expected payments.

The IRS clarified that “total refunds issued” refers to current-year returns processed in 2026, while direct deposit totals may include both current and prior-year returns processed during the same period.

Why Refund Amounts Are Increasing

Refund growth is linked to provisions enacted under last summer’s sweeping tax legislation often referred to as the “One Big Beautiful Bill.”

Changes affecting 2025 returns filed in 2026 include:

• Adjusted tax treatment for certain tip income.
  
• Expanded deductions tied to overtime earnings.
  
• Specific Social Security tax relief provisions for seniors.
  
• Auto loan interest deductions for qualifying vehicles.
  
• Extensions of tax cuts that were set to expire at the end of 2025.
  

Independent forecasts suggest upper-income households within the top 10% may see larger dollar increases due to itemized and business-related deductions. Lower-income households may see smaller increases on average, though refundable credits remain significant for eligible families.

Also Read: 2025 US Tax Returns: Important Deadlines, Penalties and Refund Details You Must Know

For context, the average refund for the 2025 tax year is projected to reach approximately $3,800, compared with $3,052 in 2024 and $3,004 in 2023, according to reported analyses. So far this season, the IRS has sent out 7.4 million refunds averaging $2,290 — roughly $200 more than the same time last year.

EITC and ACTC Refund Delays Under Federal Law

Refunds tied to the Earned Income Tax Credit (EITC) and the Additional Child Tax Credit (ACTC) remain subject to mandatory delays under the Protecting Americans from Tax Hikes (PATH) Act of 2015.

The law requires the IRS to hold refunds claiming these credits until at least mid-February to prevent fraud. The hold applies to the entire refund, not just the credit portion.

Early filers claiming EITC or ACTC should begin seeing refunds around March 2, 2026.

Key figures include:

• Maximum EITC for families with three or more children: $8,046 for tax year 2025.
  
• ACTC refundable portion: up to $1,700 per qualifying child.
  
• To qualify for ACTC, individuals must have at least $2,500 in income.
  
• EITC income thresholds vary, including $19,104 or below for single filers without children and up to $68,675 for married filers with three or more children.
  

IRS Workforce Cuts and Amended Return Backlog

Operational strain remains a major concern. The IRS workforce has been reduced by approximately 27%. Nearly 590,000 amended returns are currently backlogged — roughly 20,000 more than last year and about four times the 2019 pre-pandemic level.

Amended returns are especially vulnerable to delays because they often involve corrections to income, credits, deductions, or refund amounts.

The Treasury watchdog warned that staffing shortages could delay refunds and increase costs. The IRS pays interest on refunds issued more than 45 days after the filing deadline. In 2025, that cost totaled more than $2.6 billion. The interest rate for the first three months of 2026 stands at 7%.

Telephone service goals have also been reduced from 85% to 70%, meaning the agency now aims to answer seven out of ten calls.

Paper Checks Phased Out and CP53E Notices

A major procedural change this year involves refund payments.

The IRS has phased out automatic paper checks. Refunds are now processed by direct deposit by default. Taxpayers who fail to include accurate banking details will not automatically receive a paper check.

Instead:

• Refunds may be frozen.
  
• A CP53E notice is issued.
  
• Taxpayers have 30 days to provide correct banking details through their IRS account.
  
• If no response is received, a paper check may be issued approximately six weeks later.
  

Electronic filing combined with direct deposit remains the fastest route, with most refunds typically issued within 21 days.

Website Traffic Surge and Temporary Outages

IRS.gov traffic is up 35.2% compared to last year, reaching 126.7 million visits so far.

During peak refund tracking periods, the IRS website displayed temporary “down for maintenance” messages. Downdetector recorded at least 300 outage complaints during one period of disruption.

Taxpayers can track refunds through the “Where’s My Refund?” tool, which updates once daily and provides three stages: Return Received, Refund Approved, and Refund Sent. Status information typically appears within 24 hours for current-year e-filed returns and about four weeks for paper returns.

E-Filing Dominates as Direct File Ends

Nearly 99% of returns received so far were e-filed. Of those, 64% were self-prepared and 36% were filed by tax professionals.

Paper returns account for only about 6% of filings but represent 72% of processing costs. The average cost to process a paper Form 1040 is $10.14, compared with just $0.23 for an e-filed return.

The IRS also discontinued its Direct File program in 2026. Lawmakers had argued that existing private-sector free filing options made the program unnecessary.

Broader Policy Uncertainty: No New Stimulus Approved

Despite online speculation, no new stimulus checks have been approved. The deadline to claim the third pandemic-era stimulus payment passed on April 15, 2025.

A proposed $2,000 “tariff dividend” payment has been discussed publicly, but it has not been formally introduced or approved by Congress or the IRS. The proposal’s viability depends heavily on a pending Supreme Court ruling on the legality of tariffs that would fund such payments. Until that decision is issued, the proposal remains uncertain.

What Taxpayers Should Keep in Mind Before April 15

The federal filing deadline remains April 15, 2026. Extensions are available until October 15 through Form 4868, but taxes owed must still be paid by April 15 to avoid penalties.

Failure-to-file penalties equal 5% of unpaid taxes per month for up to five months. Failure-to-pay penalties accrue at approximately 0.5% per month, up to 25% of unpaid balances.

A Filing Season Defined by Higher Refunds and Heightened Scrutiny

The 2026 tax season presents a clear dual narrative. Refund amounts are climbing, driven by recent tax law changes and filing patterns. Yet filings and processing activity are lower than last year, workforce reductions are significant, amended returns are backlogged, and credit-related holds remain mandatory.

For taxpayers who file electronically, provide accurate information, and avoid errors, refunds should generally move within established timelines. However, amended returns, credit claims, or missing banking details may extend waits.

As April 15 approaches, the season continues to evolve. Larger refunds may offer relief to many households — but processing capacity and policy shifts will ultimately determine how smoothly payments reach taxpayers.

FAQs on IRS Tax Season 2026: Bigger Refund Checks, Fewer Returns and EITC Delays Explained