This Group Will Likely Benefit the Most From Tax Breaks in 2026

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Millions of taxpayers may be in line to receive larger tax refunds in 2026.

Thanks in large part to the One Big Beautiful Bill Act (OBBBA), many Americans will see some kind of tax break when they file taxes in 2026. President Trump promised many of these breaks before retaking office, and the passage of the OBBBA made them a reality. While many taxpayers will realize benefits, one group in particular will likely do so more than others.

What Changes in 2026?

The OBBBA made many of the tax changes implemented in the Tax Cuts and Jobs Act (TCJA) that Trump passed during his first term permanent. There are several key changes taxpayers must be aware of and how they will impact their taxes.

Among other changes, the child tax credit is now indexed to inflation, there’s a new $6,000 senior deduction and there’s a new above-the-line charitable deduction for non-itemizers, according to Schwab. These are all helpful changes for Americans struggling to make ends meet, but it’s not where much of the tax-cuts will occur, thanks to the OBBBA.

High-Income Households Are the Real Winners

Although most taxpayers will see some benefit from tax breaks, high-income households and the wealthy are most likely to do so. The average taxpayer will save roughly $2,900 on taxes in 2026, according to the Tax Policy Center.

However, the Tax Policy Center found that wealthier taxpayers will enjoy a larger boost relative to lower-income filers. The organization found that 60% of the benefits would go to filers in the top quintile, or those with incomes of $217,000 or more.

A key factor behind the outsized benefit is that high-income households are more likely to take advantage of tax deductions rather than credits. The former directly reduces your taxable income.

The significant increase in the State and Local Tax (SALT) deduction is a key driver behind this, according to Thomson Reuters. The OBBBA increased the deduction cap from $10,000 to $40,000, with increases through 2029. Taxpayers who take advantage of the SALT deduction, among others, can reduce their liability and improve their chances of a larger refund.

Why Middle and Lower-Income Families Will See Smaller Gains

Reports indicate that most taxpayers will receive some tax break, but lower- and middle-income Americans will realize smaller cuts. Nearly half of Americans will get a cut of under $100, with two-thirds netting less than $500, according to the Budget Lab at Yale.

Expanded standard deductions will help non-itemizers, but savings are typically limited when your tax bill is relatively smaller. Additionally, the child tax credit, overtime and tip deductions and charitable write-offs are helpful to lower-income Americans; They all have income phaseouts, according to the IRS. If taxpayers are above those phaseouts, they will see a smaller refund that reduces their helpfulness. For Americans already dealing with economic headwinds, this could intensify challenges.

What This Means for Tax Planning

The top 20% of taxpayers will see the largest benefit. If you’re not in the top quintile, there may still be some ways to increase your tax refund.

Look to see if you qualify for the new senior deduction or can benefit from the new charitable write-off. Make sure your withholding reflects the new tax brackets, so you don’t get a surprise come tax time. Speaking to a tax professional can be a good way to get an idea of how you can improve your tax situation.

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