Maritza Montejo, a Liberty Tax Service office manager, helps Aurora Hernandez (left) with her taxes at a Liberty Tax Service office on the last day to file taxes on April 15, 2026 in Miami, Florida. (Photo by Joe Raedle/Getty Images)
WASHINGTON — The 2026 tax-filing season ended Wednesday with the Trump administration and Republicans on Capitol Hill celebrating the success of last year’s massive tax cuts bill, while Democrats said any benefits had been wiped out by skyrocketing gasoline prices, inflation and more.
More than 53 million Americans claimed at least one new benefit, equivalent to an average tax cut of $800, under the tax cutting and spending package passed by Republicans in Congress and signed into law by President Donald Trump on July 4thaccording to the Ministry of Finance.
Originally called the “One Big Beautiful Bill Act” but renamed the “Working Families Tax Cuts Law” by Republicans, the measure made lasting the tax brackets cut by Trump in 2017.
It also quadrupled the cap on state and local tax deductions and increased the child tax credit by $200.
Democrats celebrated Tax Day by criticizing the law and pointing it out increasingly Inflation and tariff costs are eroding the value of tax breaks as both sides try to gain an advantage by spreading their messages ahead of crucial midterm elections that will determine control of Congress.
Tips, car loans, overtime
The new Law Reduce taxes on tips by 2028 and on eligible auto loan interest by 2029.
As for Trump’s campaign promise not to tax overtime, the law would limit the benefit to up to $12,500 in overtime earnings for individuals and $25,000 for joint earners by 2028.
Additionally, eligible seniors can now deduct up to $6,000 for individuals and $12,000 for couples through 2029.
Treasury Secretary Scott Bessent said in a Tax Day statement that Trump’s leadership “upholds the fundamental principle that hardworking Americans should be rewarded, not punished with tax increases, and the results of this tax season prove that.”
According to Internal Reven Service statistics released Wednesday:
- Six million filers claimed no taxes on tips, with an average deduction of $7,100.
- 25 million filers claimed no overtime taxes, an average deduction of $3,100.
- Thirty million seniors claimed the expanded senior tax credit, receiving an average benefit of $7,500.
- One million Americans deducted auto loan interest, cutting an average of $1,800.
Bessent, acting IRS commissioner after a Sales volume of six IRS Commissioners in 2025 said the agency has “worked tirelessly to ensure our tax system works for the people it is designed to serve.”
“From the garage to the kitchen table, taxpayers are feeling the difference of the largest tax cuts in our country’s history, and millions of Americans are keeping more of what they earn and seeing their paychecks bigger than ever before,” Bessent said.
The White House on Tuesday distributed a collection of statements from taxpayers praising the new deductions.
Trump also had a photo op on Monday when he receive a McDonald’s delivery from a self-proclaimed “DoorDash grandma” who praised tax breaks for her tips at a planned event. Trump then pulled cash from his pocket and handed it to the woman Sharon Simmons of Arkansas, who represented the technology delivery service.
Simmons, no newcomer to such GOP appearances either stated In slow July 2025, after the passage of the tax bill, before the Ways and Means Committee of the U.S. House of Representatives to praise the No Tax on Tips policy.
134 million income tax returns
IRS Chief Executive Officer Frank Bisignano told Senate tax editors on Capitol Hill Wednesday that the 2026 tax filing season will be the “most successful tax filing season in IRS history.”
Trump created the position of IRS CEO last year. Bisignano is also commissioner of the U.S. Social Security Administration.
“This groundbreaking legislation forms the cornerstone of the administration’s growth agenda. The latest numbers tell the story,” Bisignano told the Senate Finance Committee during the panel’s annual oversight hearing to examine tax collections.
According to the IRS, more than 134 million income tax returns for 2025 earnings have been filed with the agency so far, 98% of them electronically. Bisignano welcomed the granting of 80 million refunds, which averaged $3,400, an boost of 11% compared to 2024.
Senate Democrats on the panel highlighted the costs of the new tax system and questioned whether a shrinking IRS workforce would contribute to less enforcement.
Sen. Michael Bennet, D-Colo., said: “The lack of cops on duty at the IRS will cost the United States Treasury $646 billion in unpaid taxes from the richest people in America.”
Accordingly ReportsLast year, about 26,000 employees left the IRS as part of Trump’s stimulus for public service cuts and layoffs.
“I remember you saying in our meeting before your confirmation that you were deeply concerned about the level of national debt in this country,” Bennet told Bisignano. “It’s $38 trillion and a big chunk of that is due to Trump’s completely unpaid tax bill.”
The cost of the tax bill will be felt in the coming years, according to members of Congress.
The nonpartisan Congressional Budget Office and the Joint Committee on Taxation appreciated The law will cost $3.4 trillion over the next decade – more than $4 trillion if you take into account the interest accruing on the country’s debt.
A analysis The Tax Foundation, which generally advocates for lower taxes, found that tax revenue in U.S. states will decline by nearly $5.2 trillion over the next decade. Accordingly, individual income taxes have been the government’s largest single source of revenue since 1944 Data compiled by the Tax Policy Center, a partnership between the Urban Institute and the Brookings Foundation.
How the tax cuts were offset
Lawmakers who wrote the massive tax law accounted for some of the lost revenue by revising eligibility and work requirements for federal health and food assistance for low-income Americans.
About 2.5 million Americans have done so, according to a recent report from the progressive Center on Budget and Policy Priorities lost Supplemental Nutrition Assistance Program (SNAP) benefits since the tax law took effect.
The CBO expects the bill will make changes to work requirements for Medicaid, the federal health care program for low-income people Result leading to millions of Americans losing their health insurance.
Senate Republicans defended the bill, saying it helps Americans by avoiding “the largest tax increase in American history.”
“If the 2017 tax cuts had expired, taxpayers making less than $400,000 would have faced a tax increase of more than $2.6 trillion over the next decade,” said Senate Finance Committee Chairman Mike Crapo, R-Idaho.
Canned pilot program
The panel’s ranking Democrat, Sen. Ron Wyden, D-Ore., criticized new legislation eliminating a free alternative to tax filing, IRS Direct File, enacted as part of former President Joe Biden’s budget reconciliation megabill.
The narrow pilot program offered a free filing portal directly through the IRS and was available to 19 million taxpayers in 2024.
“Direct File in America died under Mr. Bisignano’s watch,” Wyden said, adding that shutting down the program once again leaves taxpayers at the mercy of “tax software giants who charge inflated prices for a service that should be free.”
Rather, the IRS offers Free File, an option available to taxpayers below a certain income level, now capped at $89,000, through a handful of tax preparation software companies that contract with the federal government.
An inspector general for tax administration in 2019 report described the program as “full of complexity and confusion.” It is estimated that approximately 14 million taxpayers eligible for free filing were directed to pages that asked them to pay for add-ons and additional services.
Taxpayers of all income levels have the opportunity to submit their tax return free of charge using a fillable PDF shapesbut this option requires manual input without guided prompts.
Wyden said the agreement was a “billion-dollar rip-off.”
Bisignano called Direct File an “unnecessary and less popular duplicate program.”
Democrats continue their “affordability” argument
The Democratic National Committee used Tax Day to highlight Trump’s policies and utilize of taxpayer money. With the upcoming midterm elections, affordability is at the forefront.
Although Trump campaigned on lowering prices and taxes, DNC Chairman Ken Martin said in a statement that the president has so far given Americans “a reckless trade war that has driven up prices and a deadly and costly taxpayer-funded war with Iran.”
“This Tax Day, Americans are seeing their bank accounts being refunded less than promised, which doesn’t even cover the higher costs Trump has forced on them. It couldn’t be clearer: Trump and the Republican Party are on the side of billionaires, big corporations and wealthy special interests,” Martin said.
