JPMorgan Predicts 2026 Tax Refund Surge: What CPAs and Advisors Should Prepare For

Adam Tahir
3 days ago
2 min read

Tax season 2026 could look very different. According to a new JPMorgan research report, U.S. taxpayers are expected to see larger-than-usual refunds, averaging $3,743 per filer.

This refund surge comes as a result of ongoing withholding levels under the One Big Beautiful Bill Act (OBBBA), which reshaped withholding tables but delayed certain offsetting changes until tax year 2026.

For CPAs, financial planners, and businesses, this development could shift both tax workflows and broader economic dynamics.

What’s Driving the Refund Surge?

Withholding Mismatch
- OBBBA reduced effective tax liability for many taxpayers.
- But current withholding tables were not fully updated, meaning more tax is being withheld from paychecks than ultimately owed.
Refund Distribution
- Average refunds are projected at $3,743.
- Some filers—particularly middle-income households—may see even larger refunds.
Timing Effect
- The IRS expects refunds to begin hitting bank accounts by February–March 2026, injecting liquidity into the economy just ahead of spring consumer spending cycles.

Why It Matters

For Tax Professionals

Client Expectations: Advisors must prepare clients for refunds higher than usual—but also educate them on why this is occurring.
Tax Planning: Encourage clients to adjust withholding if they prefer higher monthly cash flow instead of waiting for a lump-sum refund.
Audit Risk: As always, ensure clients don’t misinterpret the surge as an “extra payment.” It is simply a correction of overwithholding.

For the Economy

JPMorgan predicts the refund wave could act like a mini stimulus, temporarily boosting consumer spending.
This may complicate Federal Reserve policy, delaying rate cuts if the spending surge fuels short-term inflation.

For Businesses

Retailers could see a spending bump in Q1–Q2 2026.
Advisors may want to forecast cash flow impacts for clients in consumer-facing industries.

What’s Next?

The IRS has confirmed that withholding tables will be updated for tax year 2026, likely bringing refunds back down to historical averages.

In the meantime, tax professionals should:

Educate clients about why refunds are larger this season.
Revisit withholding strategies for clients who prefer steadier paychecks.
Prepare advisory materials to help clients put their refunds to productive use (e.g., paying down debt, investing, or saving for retirement).

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