The IRS issued $296 billion in refunds during the 2026 filing season — 17% more than a year earlier — as taxpayers claimed new deductions under President Donald Trump’s One Big Beautiful Bill Act, even as staffing and technology problems produced lengthy delays for paper filers.
By yourNEWS Media Newsroom
American taxpayers received substantially more money back from the Internal Revenue Service during the 2026 filing season, with total refunds climbing to $296 billion following tax changes enacted through President Donald Trump’s One Big Beautiful Bill Act.
The total was $43 billion higher than the amount refunded during the 2025 filing season for tax year 2024, representing a year-over-year increase of 17%, according to a new Government Accountability Office report.
Individual refund amounts also increased. The average payment rose by $333, or 11%, from the previous year.
The GAO attributed part of the increase to newly available deductions created by Trump’s tax legislation. Millions of taxpayers claimed provisions covering qualified tips and overtime pay, increasing the amount of money returned through the tax system.
The IRS did not merely issue larger refunds. It also sent considerably more of them, distributing more than 8 million additional refunds than it had during the 2025 filing season.
Those gains came during a year in which the agency was simultaneously coping with a smaller processing workforce, malfunctioning paper-processing technology and major delays for taxpayers who did not receive refunds electronically.
Despite those difficulties, the IRS processed approximately 98% of the 177 million individual and business tax returns it received during the filing season, a completion rate roughly in line with the previous year.
The experience differed sharply depending on how taxpayers filed their returns and received their refunds.
Those using direct deposit generally received their money relatively quickly. Nine out of 10 electronically deposited refunds arrived within 21 days, according to the GAO.
Paper checks were another matter.
“Most paper check refunds were delayed by weeks,” the GAO reported.
The IRS has been shifting refund payments toward direct deposit and away from mailed checks. By early May, the agency had sent approximately 4.2 million notices asking taxpayers to submit bank account information so their refunds could be delivered electronically.
Those who did not respond were informed that a paper refund check would be issued after six weeks.
The policy produced a dramatic reduction in mailed refunds during the early portion of the filing season. By early April, the IRS had issued approximately 493,000 paper refund checks, down more than 80% from roughly 2.8 million during the comparable period in 2025.
Taxpayers who ultimately received their refunds by check waited an average of 36 days.
A year earlier, the average had been 13 days.
That meant the IRS took nearly three times as long to deliver an average paper refund check in 2026 as it did during the previous filing season, even while direct-deposit recipients largely avoided similar delays.
Smaller Workforce and Technology Failures Slow Paper Processing
The most serious operational problems were concentrated in the IRS division responsible for receiving and processing tax returns.
The Submission Processing unit finished the 2026 filing season with 8,111 employees, an 18% decline from the 9,850 workers assigned to the operation at the end of the previous filing season.
IRS officials told the GAO that the unit did not have enough employees “to process returns timely.”
The staffing problems were particularly visible in the handling of business returns.
Processing time for business Form 941 returns averaged 72 days during the 2026 filing season, compared with 45 days in 2025 and just 25 days in 2024.
The IRS target for those returns was 32 days, meaning the average 2026 processing period was more than twice the agency’s stated goal.
Individuals submitting returns on paper encountered delays as well.
The IRS took an average of 30 days to process an individual paper return, more than double its target of 13 working days.
The agency received approximately 8.9 million paper returns during the filing season, 19% fewer than in 2025. Yet the reduced volume did not translate into faster processing.
IRS employees processed 46% fewer individual paper returns and 80% fewer business paper returns than during the previous filing season, according to the GAO.
Staffing losses were only part of the problem.
The agency also experienced failures involving the systems used to handle paper filings.
“IRS’s individual paper processing system was unable to process tax year 2025 returns for the first 6 weeks of 2026, and its scanning system for business paper returns was unable to process tax year 2025 returns for the entire 2026 filing season, according to IRS officials,” the report stated.
IRS officials told GAO investigators that the systems had not been ready when filing season opened because the agency had lost experienced employees responsible for information technology acquisitions.
The IRS turned increasingly to outside contractors to make up for its internal processing limitations.
Approximately 3.7 million business paper returns were sent to vendors for scanning during the 2026 filing season.
That represented a 725% increase from the approximately 443,000 returns outsourced for scanning one year earlier.
Taxpayers Shift Toward IRS Digital Services
As traditional IRS assistance and paper processing became more constrained, taxpayers made greater use of the agency’s online services.
Through April 2026, taxpayers completed approximately 155 million successful logins to individual IRS online accounts.
That was the highest total recorded during the six-year period examined by the GAO.
Use of the agency’s refund-tracking service also climbed.
The “Where’s My Refund?” tool received approximately 346 million visits during the filing season, an increase of 9% from 2025.
The surge in digital activity came as taxpayers navigated two very different realities during the 2026 filing season: significantly larger refunds for millions of households alongside slower service for those still dependent on paper processing.
Overall refunds reached $296 billion, up $43 billion from the previous year, while average refunds increased $333 and the IRS sent more than 8 million additional payments.
At the same time, staffing in the agency’s Submission Processing operation fell 18%, paper refund checks took an average of 36 days to arrive and some business returns required more than two months to process.
The result was a filing season in which taxpayers benefiting from Trump’s new deductions generally received larger refunds, while the efficiency of receiving those refunds depended heavily on whether the taxpayer used electronic filing and direct deposit rather than paper.
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