What determines whether your refund grows or shrinks year to year

Your refund size depends almost entirely on how much tax you overpaid during the year, not on what year it is. The IRS does not give larger refunds in 2026 than 2025 because of the calendar. What matters is the gap between the tax withheld from your paychecks (or paid through estimated taxes) and what you actually owe when you file. If you earn more, claim fewer deductions, or change your withholding, your refund will change. If nothing changes in your income or tax situation, your refund will be roughly the same.

The one exception is the Tax Cuts and Jobs Act (TCJA), which is set to expire after 2025. This law lowered tax rates and increased the standard deduction. Unless Congress extends it, those provisions end on December 31, 2025. If they expire, tax rates will rise and the standard deduction will fall starting in 2026, which would mean more tax owed and potentially smaller refunds for most filers—but only if Congress does not act.

Key Takeaways

  • Your refund size is determined by how much tax you overpaid during the year, not by the year itself or IRS policy changes.
  • If your income, deductions, or withholding stay the same from 2025 to 2026, your refund will stay roughly the same.
  • The Tax Cuts and Jobs Act provisions expire after 2025 unless Congress extends them, which could lower refunds in 2026 if rates rise.
  • Changes to your W-4 form, marriage status, dependents, or side income will affect your 2026 refund more than any calendar year difference.
  • You can estimate your 2026 refund now by using the IRS Withholding Estimator tool and adjusting your W-4 if needed.

How income changes affect your refund

If you earn more in 2026 than you did in 2025, your refund may shrink even if your employer withholds more tax. This happens because higher income can push you into a higher tax bracket or reduce deductions you were using. For example, if you earn $5,000 more but your employer only withholds an extra $800, you will owe more tax overall, and your refund will be smaller.

The opposite is also true: if you earn less in 2026, your refund may grow. Lower income means you owe less tax, and if your withholding stays the same, you will have overpaid more. This is common for people who change jobs, take unpaid leave, or retire partway through the year.

If you have side income from freelance work, gig work, or a business, that income is taxable and must be reported on your 2026 return. If you did not withhold tax on that income or pay estimated taxes, you will owe more and your refund will shrink—or you may owe money instead of getting a refund.

Life changes that reshape your refund

Marriage, divorce, and children all change your tax situation. If you marry in 2026, you can file jointly starting that year, which often lowers your overall tax and changes your refund. If you divorce, you will file as single or head of household, which typically raises your tax. If you have a child in 2026, you gain a dependent exemption and the child tax credit, which will lower your tax owed and likely increase your refund.

Buying a home also affects your refund because you can deduct mortgage interest and property taxes if you itemize deductions. This deduction is large enough that some people switch from the standard deduction to itemizing, which can significantly lower their tax and raise their refund. However, the standard deduction is also very high under current law, so you need substantial mortgage interest and property taxes to benefit.

If you turn 65 in 2026, you get an extra standard deduction, which lowers your tax. If you retire and stop working, your income drops, which usually means a larger refund if you had been overpaying.

What happens if the Tax Cuts and Jobs Act expires

The TCJA lowered federal tax rates and nearly doubled the standard deduction. These changes are set to expire on December 31, 2025, unless Congress votes to extend them. If they expire without extension, tax rates will rise and the standard deduction will fall starting in 2026. This would mean most filers owe more tax, which would shrink refunds across the board.

However, Congress has extended or modified major tax provisions before, and it may do so again. The outcome is uncertain and depends on political decisions that have not been made yet. You should not assume the TCJA will expire; instead, monitor news from Congress in late 2025 to see whether an extension passes.

If the TCJA does expire, the IRS will update withholding tables and tax brackets in early 2026. Your employer will use the new tables to withhold tax from your paychecks. If you want to adjust your withholding before that happens, you can file a new W-4 form with your employer.

How to adjust your withholding now

If you think your 2026 refund will be different from your 2025 refund, you can adjust your withholding using the IRS Withholding Estimator tool at irs.gov. This tool asks about your income, deductions, dependents, and other tax factors, then tells you whether you are withholding too much or too little. If you are withholding too much, you will get a larger refund; if you are withholding too little, you will owe money.

Once you know whether you need to adjust, you file a new Form W-4 with your employer. This form tells your employer how much tax to withhold from each paycheck. You can file a new W-4 at any time, and it takes effect on the next paycheck or within a few weeks. There is no cost, and you can change it as many times as you need.

If you are self-employed or have income that is not subject to withholding, you may need to pay estimated taxes quarterly. These are payments you make directly to the IRS in April, June, September, and January. If you do not pay estimated taxes and owe a large amount at tax time, you may face penalties and interest.

Comparing your 2025 and 2026 refunds

The best way to predict your 2026 refund is to look at your 2025 return and ask whether anything has changed. Did your income go up or down? Did you get married, divorced, or have a child? Did you buy a home or retire? Did you start a side business? Each of these changes your tax situation and your refund.

You can also use the IRS Withholding Estimator to run a scenario for 2026 based on what you expect to earn and claim. This gives you a rough idea of whether your refund will be larger, smaller, or about the same. Keep in mind that this is an estimate; your actual refund depends on what you report when you file.

If you received a very large refund in 2025, that means you overpaid significantly during the year. You could adjust your W-4 to reduce withholding and take home more money each paycheck instead. If you received no refund or owed money in 2025, you may want to increase withholding to avoid owing again in 2026.

Frequently Asked Questions

Does the IRS give bigger refunds in certain years?

No. The IRS does not adjust refund amounts based on the calendar year. Your refund depends only on how much tax you overpaid, which is determined by your income, deductions, withholding, and tax credits. The year itself does not matter.

Will my 2026 refund be smaller if the Tax Cuts and Jobs Act expires?

It could be, but only if Congress does not extend the law. If the TCJA expires, tax rates will rise and the standard deduction will fall, which would increase the tax owed by most filers and shrink refunds. However, Congress may extend the law before it expires, so the outcome is not certain yet.

How much will my refund change if I get married in 2026?

That depends on your spouse's income and tax situation. Filing jointly often lowers your combined tax, which can increase your refund. However, if your spouse earned a lot and had little withholding, you may owe money instead. Use the IRS Withholding Estimator to see how marriage affects your specific situation.

Can I change my withholding before 2026 to get a bigger refund?

Yes. You can file a new W-4 form with your employer at any time to adjust your withholding. If you want a bigger refund, you can claim more allowances or adjustments to reduce withholding, which means less tax is taken from each paycheck and more money is refunded when you file. However, this also means less money in your pocket each month.

What if I have no idea whether my 2026 refund will change?

Use the IRS Withholding Estimator tool on irs.gov. It walks you through your income, deductions, and credits and tells you whether you are withholding the right amount. This takes about 10 minutes and gives you a clear picture of what to expect.