Weekly Column: Tax Season Is Ending, But Tax Relief Is Not

Guest column submitted by U.S. Senator for Idaho Mike Crapo
This year, Tax Day means more than a break from paperwork. Because Republicans delivered new middle-class tax relief, hardworking Idahoans can count on larger-than-normal refunds and more breathing room in their budgets this year, enabling them to spend, invest and save for the future. And while this year’s tax season is ending, people will continue benefitting from these policies for years to come.
At the core of the Working Families Tax Cuts law is its prevention of a $4 trillion tax hike, paired with permanently lowered rates to spur economic growth. The law also extended and expanded a swath of deductions and tax credits to help Americans withstand the Biden-created affordability crisis.
That plan is working. Recent Internal Revenue Service (IRS) data show that over 60 million Americans have received refunds this tax season totaling $221.7 billion, a 13.6 percent increase over last year, with the average refund climbing to over $3,500.
Taxpayers are eagerly taking advantage of new provisions like deductions for tipped income, overtime and car loan interest, and the enhanced senior deduction. These policies were drafted with everyday Americans who work hard to make ends meet in mind, which is why it is estimated roughly half of filers claimed at least one of these deductions so far this year.
And contrary to false narratives about tax cuts for billionaires, the Joint Committee on Taxation, Congress’s independent tax scorekeeper, found that the largest proportional benefits of that new relief go to workers and families making less than $50,000. It is easy to see how—just ask a waitress benefiting from “no tax on tips” or a police officer taking advantage of the new “no tax on overtime” policy what the law has meant to their household budgets.
Taxpayers should be aware of other new and enhanced benefits, too. For example, Trump Accounts, a new long-term savings account, will help American children build financial security from birth. Children born between January 1, 2025, and December 31, 2028, will qualify for a $1,000 contribution from the U.S. Treasury to their account, which is estimated to benefit over 15 million kids.
The Paid Family and Medical Leave tax credit is permanently extended and enhanced, further incentivizing businesses to provide employees with this benefit. The law also encourages businesses to provide child care to their employees through a permanent expansion of the Employer-Provided Child Care Credit, and it increases the Child and Dependent Care Tax Credit and the Dependent Care Assistance exclusion.
While the Working Families Tax Cuts are providing new tax relief, more can be done to reduce the burden of filing a return. I recently introduced bipartisan legislation with Finance Committee Ranking Member Ron Wyden (D-Oregon) that will improve communication between the IRS and taxpayers and streamline processes for tax compliance.
Building on recommendations from the nonpartisan National Taxpayer Advocate, the bill would improve the taxpayer experience by adding more IRS callback lines and upgrading the agency’s online portal. It would also strengthen standards for paid tax preparers and protect victims of fraud from indefinite IRS scrutiny, among other changes.
The benefits of the Working Families Tax Cuts do not stop once a taxpayer receives their refund. Its permanent pro-growth provisions give job creators an ideal environment in which to expand, creating more and better-paying jobs in communities across the country. And, of course, you do not have to wait until next year’s refund to see the effects in your own budget. For the majority of Americans, every paycheck is a little bigger than it would be otherwise.