WASHINGTON, March 30 - U.S. Treasury Secretary Scott Bessent said on Monday that individual tax refunds during the 2026 filing season are up by more than 10% compared with last year, and that nearly half of filers are claiming new deductions introduced by the Republican tax cut law passed last year.
Speaking on Fox and Friends, Bessent said that 25% of the tax returns the Internal Revenue Service has received so far include a deduction for overtime premium pay earned in 2025, a measure he described as "the home run" of the set of new deductions. He noted that other deductions being claimed include exemptions for no-tax income from tips, Social Security benefits, and auto loan interest for domestic cars.
Referencing the IRS filing data through March 20, Bessent said the average individual refund this year was $3,571, an increase of $350 or 10.9% from the same period in 2025. He attributed part of the shift in taxpayer behavior to changes in the tax code, including a $30,000 increase in the deduction for state and local taxes, and said many taxpayers are reducing their withholding for 2026 earnings. "They’re getting automatic pay increases by changing their withholding," he added.
Bessent also addressed financial-crime reporting, saying that bank filings of "suspicious activity reports" related to potential fraud and money-laundering are up 20% this year. He linked that increase to a crackdown on fraudulent activity involving federal healthcare and social benefits, which he said has reached into the billions of dollars.
To bolster enforcement, Bessent encouraged members of the public to submit tips via a Treasury whistleblower website. He noted that informants can receive rewards of up to 30% of recovered funds when their information leads to recoveries. According to his remarks, the effort has produced 700 leads for investigators at the Treasury’s Financial Crimes Enforcement Network.
Context and fiscal implications
Bessent’s comments emphasize two concurrent developments in the early 2026 filing season: a notable rise in average refunds and a broad uptake of newly available deductions, and an increase in reporting tied to suspected fraud in federally administered benefit programs. The Treasury secretary tied behavioral changes in withholding to the new deduction structure, while also highlighting enforcement tools aimed at curbing large-scale fraud.