States That Could Receive the Highest Tax Refunds This Year

The 2026 tax season could bring higher refunds for certain taxpayers in the United States.

Why it matters: A tax refund represents a key source of income for millions of families, helping them pay off debts, cover medical expenses, or strengthen their savings. In some states, the average refund amount could be considerably higher depending on each taxpayer’s financial profile.

Although the Internal Revenue Service (IRS) has not yet released an official state-by-state breakdown with final averages, historical data and recent tax changes allow analysts to anticipate which regions and taxpayer groups could benefit the most.

Preliminary IRS reports show that the national average tax refund has increased compared to the previous year, driven by adjustments to deductions and withholding amounts.

States With Highest Tax Refunds

Historically, some territories have led the list of states with highest tax refunds at the federal level, according to analyses based on official IRS statistics from recent completed tax years.

States That Could Receive the Highest Tax Refunds This Year – PHOTO: DepositPhotos

Among them are:

Wyoming

Florida

Washington, D.C.

In these places, taxpayers have recorded refund averages above the national level. The reasons vary: higher incomes, larger tax withholdings during the year, or a combination of tax credits and deductions that reduce the final tax obligation.

Although the IRS has not yet confirmed specific state figures for 2026, if economic conditions remain similar, these areas could once again appear among the states with highest tax refunds this year.

The Effect of the SALT Deduction

One of the most significant changes this tax season is the temporary expansion of the State and Local Tax (SALT) deduction.

The limit increased from $10,000 to $40,000 for certain qualifying taxpayers.

States That Could Receive the Highest Tax Refunds This Year – PHOTO: DepositPhotos

This change could especially benefit residents in states with high state and property taxes, such as:

New York

New Jersey

California

The SALT deduction allows taxpayers to subtract those state and local taxes paid from their federal tax calculation. If a taxpayer itemizes deductions instead of taking the standard deduction, the impact can be significant.

However, the benefit is not automatic. It only applies to taxpayers who meet the requirements and choose to itemize deductions.

Who Could Benefit the Most From Higher Tax Refunds?

Beyond state residency, some specific groups could see a greater impact on their tax returns this year.

People over 65 years old

A temporary additional deduction has been introduced for certain older taxpayers, subject to income limits. This could reduce taxable income and, if too much tax was withheld during the year, result in a larger refund.

Workers who receive tips and overtime pay

Recent changes allow deductions related to income from tips and overtime compensation. Sectors such as hospitality and services could see a positive impact if more taxes were withheld than necessary throughout the year.

High-income taxpayers in high-tax states

Those who combine large state tax payments with the expanded SALT deduction could see significant differences, particularly if they itemize deductions and apply other tax strategies permitted by law.

Are Tax Refunds Increasing in the 2026 Tax Season?

Preliminary IRS data indicates that the national refund average has increased compared with last year.

The reasons include:

Adjustments to withholding tables that do not always perfectly reflect a taxpayer’s final situation.

Recent legislative changes.

The impact of inflation on wages and withholding amounts.

It is important to remember that a refund is not extra money from the government—it is simply the return of taxes that were overpaid during the year.

What Could Happen Next

The final refund amount will depend on each taxpayer’s individual profile.

Key factors include:

Whether the taxpayer chooses the standard deduction or itemizes deductions

Income level

Applicable tax credits

Withholding amounts throughout the year

Although some regions historically appear among the states with highest tax refunds, the outcome is always personal.

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“Taxpayers in the United States are receiving higher refunds at the start of the 2026 tax season, according to official data from the Internal Revenue Service.” https://t.co/oMmeUUcP04

— Primer Impacto (@PrimerImpacto) February 18, 2026

What Comes Next

The IRS will continue releasing updates as the tax season progresses.

Meanwhile, taxpayers can review their situation on IRS.gov or consult a tax professional to better understand how recent changes could affect their tax return.

Although trends point to larger refunds in certain states and among specific groups, the final result will depend on each individual case.

The 2026 tax season could mean more money back for some taxpayers. But, as always in tax matters, the details make the difference.

Photos | DepositPhotos