The IRS confirmed it won’t adjust paycheck withholdings this year to reflect the new Trump tax law. That delay means many Americans will see larger tax refunds in early 2026, as the savings will come in one lump sum rather than spread out in paychecks. Meanwhile, a new proposal called the American Worker Rebate Act of 2025 could push even more money into taxpayers’ hands.
What’s causing larger refunds in 2025?
President Donald Trump’s latest tax overhaul includes increases to the standard deduction and new exemptions for tipped and overtime income. However, the IRS announced that employers should continue using existing withholding formulas, at least through the end of the year.
As a result, most workers won’t see extra cash in their take-home pay now—but they will collect it later as part of their 2025 tax refunds. That timing aligns with the run-up to the November 2026 midterm elections, which could boost public support among voters.
What is the American Worker Rebate Act?
Missouri Senator Josh Hawley introduced the American Worker Rebate Act of 2025, aiming to provide $600 per adult and dependent, or $2,400 for a family of four. The rebate amount would phase out for households earning over $150,000 jointly or $75,000 individually.
The rebates would come from rising tariff revenue under Trump’s new trade policy. According to the Treasury Department, customs duties reached $27 billion in June 2025, up more than 300% from a year earlier.
Trump hinted at the rebate idea in July, saying:
“We’re thinking about a little rebate… but the big thing we want to do is pay down debt.”
Lawmakers tied the bill’s size to tariff revenue. If collections surpass expectations, the rebate could increase beyond the $600 baseline.
What’s the difference between a rebate and a stimulus check?
Though both offer cash to taxpayers, there are key differences:
- Rebate: A refund tied to specific government revenues (in this case, tariffs)
- Stimulus Check: A broad economic relief payment aimed at boosting consumer spending
The proposed 2025 rebate leans more toward a refund model, funded directly by tariff receipts and aimed at offsetting higher prices consumers may face from those tariffs.
Is there a 2025 stimulus or DOGE dividend?
So far, no official economic relief package has been approved by Congress for 2025. However, Trump also mentioned the possibility of a “DOGE dividend” earlier this year—an idea to return $5,000 per taxpayer using savings found by Musk’s Department of Government Efficiency (DOGE). He has not released further details, and no legislation has followed that comment.
Social media has also circulated rumors of a $2,000 fourth stimulus check, but those claims remain unverified and lack support from any official source.
What taxpayers should know
- Refunds in 2025 could be higher due to IRS withholding delays
- The American Worker Rebate Act may add $600+ in direct payments
- No stimulus checks have been approved, despite social media speculation
- Eligibility for any future payment will depend on income levels and updated IRS guidance
Taxpayers should monitor official IRS updates and ignore viral claims or suspicious messages promising stimulus money without verification.
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