Q&A: Federal Tax Cuts Help Working Families

Q&A: Federal Tax Cuts Help Working Families

With U.S. Sen. Chuck Grassley

Q: What does the 2026 federal tax filing data show?

A: The U.S. Treasury released data showing American families and workers claimed $82 billion in individual direct relief from the Working Families Tax Cuts Act signed into law one year ago on the Fourth of July. The Republican-led Congress passed the landmark tax law without a single Democrat voting for the largest tax relief in U.S. history. Without its passage, Americans would have been hit with a $5 trillion tax hike. Instead, 97% of Americans who filed taxes received a tax cut this past filing season. Many received their largest refund in years to help make a car payment, pay bills and put into savings. The Treasury data also shows where tax relief made the biggest difference: for American families and workers earning under $200,000 annually. Specifically, millions of Americans benefited from newly enacted deductions and credits on wages, overtime, tips and earned income.

Here's how Americans benefited from signature tax breaks included in the Working Families Tax Cuts Act:

• Taxpayers earning between $100,000 to $200,000 received an average tax cut of more than $1,250.
• Taxpayers earning between $50,000 to $100,000 received an average tax cut of more than $815.
• More than 7.5 million taxpayers claiming no tax on tips benefited from an average deduction of more than $7,000.
• More than 29 million taxpayers claiming no tax on overtime benefited with an average deduction of more than $3,100.
• More than 35 million taxpayers claimed the enhanced deduction for seniors. These filers had an average deduction of more than $7,500.
• More than 1.4 million taxpayers claimed no tax on car loan interest for their new American-made cars, with an average deduction of more than $1,800.

Q: How is the new tax law helping families with children?

A: The Working Families Tax Cuts Act delivered a financial lifeline to parents stretching every dollar to fill the gas tank, buy groceries and afford childcare. Simply put, the Republican-led tax law maximizes the earning power of parents, allowing them to keep more of their own hard-earned money for their household budget and expenses. It permanently lowers tax rates across the board to deliver tax savings for working families for years to come. More than 127 million taxpayers - that's 90% of all tax filers - claimed the permanently doubled standard deduction that simplifies tax filing for tens of millions of Americans across the country. It also boosted the child tax credit; nearly 40 million families claimed the enhanced child tax credit that permanently doubled the base credit amount to $2,200 per qualifying child, and indexed the credit to inflation. What's more, up to $1,700 per child is refundable if the credit exceeds one's tax liability. These dollars help moms and dads make ends meet. According to the USDA, a family spends nearly $13,000 a year on basic necessities per child through age 17.

As America celebrates its 250^th birthday on the Fourth of July, the Working Families Tax Cuts Act helped make taxpayers' wishes come true. It delivered relief to working families who wake up every day and put in the work to provide for their kids, build strong communities and grow our economy. Money in the pockets of Americans helps grow the economy and create jobs more effectively than if Uncle Sam collects and spends it.

Consider the words written by the principal author of the Declaration of Independence and our nation's third president, Thomas Jefferson. The Working Families Tax Cuts Act builds on the founding principles he articulated in his first annual message to Congress: "Agriculture, manufactures, commerce, and navigation, the four pillars of our prosperity, are the most thriving when left most free to individual enterprise." Economic freedom means Americans get to keep more of their hard-earned money to save, invest and spend as they see fit.

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