Treasury says Trump’s Working Families Tax Cuts delivered $82 billion in relief to 97% of U.S. tax filers
A new Treasury Department analysis says President Donald Trump’s Working Families Tax Cuts delivered $82 billion in tax relief during the latest filing season, with 97% of U.S. tax filers receiving a tax cut that otherwise would have disappeared when key provisions of the 2017 Tax Cuts and Jobs Act expired.
The June 2 analysis found the largest share of tax relief went to low- and middle-income households, with millions of Americans claiming new deductions for overtime pay, tips, seniors, child tax credits and auto loan interest under the One Big Beautiful Bill Act.
The Treasury Department said its latest analysis confirms the Working Families Tax Cuts delivered the largest share of tax relief directly to millions of American families, workers, seniors and small business owners.
Through the April tax filing deadline, taxpayers claimed approximately $82 billion in individual tax relief. Treasury expects that figure to rise as taxpayers who requested filing extensions continue submitting returns.
According to Treasury, without the legislation taxpayers would have faced the expiration of major provisions from the 2017 Tax Cuts and Jobs Act, resulting in what officials estimate would have been a roughly $5 trillion tax increase.
Treasury said 97% of tax filers received a tax cut during the filing season because Congress extended those provisions through the One Big Beautiful Bill Act.
Scott Bessent says tax policy rewards work
Treasury Secretary Scott Bessent said the results demonstrate that the administration’s tax policies are benefiting working Americans.
“American families and workers overwhelmingly benefitted from the Working Families Tax Cuts, receiving the largest share of the historic tax relief delivered this past filing season. This analysis confirms President Trump’s tax policies deliver substantial tax cuts to hardworking Americans and provide greater relief and financial certainty to low- and middle-income households.”
He added: “Under President Trump, our federal tax code and system reflect the American people’s mandate to reject policies that punish success with tax hikes and embrace those that restore fairness, reward work, respect hard-earned paychecks, and reignite the American Dream.”
Most tax relief went to households earning under $200,000
Treasury said the overwhelming majority of tax relief was concentrated among lower- and middle-income Americans.
According to the analysis:
96% of taxpayers receiving a tax cut earned less than $200,000 annually.
Nearly 70% earned less than $100,000.
Among taxpayers who claimed one of the new deductions:
Those earning $100,000 to $200,000 received an average tax cut of more than $1,250.
Those earning $50,000 to $100,000 received average tax savings exceeding $815.
Overtime deduction became one of the most popular tax breaks
Treasury said the new No Tax on Overtime deduction has become one of the law’s most widely used provisions.
More than 29 million taxpayers claimed the deduction, reducing taxable income by an average of more than $3,100.
According to Treasury:
75% of claimants earned less than $100,000.
96% earned less than $200,000.
Treasury Secretary Scott Bessent previously described the provision as “the home run” of the new tax law.
The deduction allows eligible workers to deduct up to $12,500 in qualified overtime income for individuals or $25,000 for married couples filing jointly through 2028.
Millions claimed the No Tax on Tips deduction
Treasury reported that more than 7.5 million taxpayers claimed the No Tax on Tips deduction.
Those workers received an average deduction of more than $7,000.
Treasury also said:
90% of taxpayers claiming the deduction earned less than $100,000.
99% earned less than $200,000.
The deduction was one of President Trump’s signature campaign promises in June 2024 during the election campaign in the swing state of Nevada.
Kamala Harris announced her support for the idea in August 2024 during a rally in Nevada, prompting the Trump campaign to accuse her of copying the proposal.
Enhanced Child Tax Credit reached nearly 40 million families
The Treasury analysis found that nearly 40 million families claimed the enhanced Child Tax Credit.
The legislation permanently doubled and expanded the credit.
According to Treasury:
65% of families claiming the credit earned less than $100,000.
89% earned less than $200,000.
The department said the expanded credit was one of the largest sources of relief for working families with children.
More than 35 million seniors claimed the enhanced deduction
The analysis also highlighted the law’s expanded tax benefits for retirees.
More than 35 million seniors claimed the Enhanced Deduction for Seniors, receiving an average deduction of more than $7,500.
Treasury said:
68% of claimants earned under $100,000.
94% earned under $200,000.
Car loan interest deduction reached more than 1.4 million taxpayers
Treasury said more than 1.4 million taxpayers claimed the No Tax on Car Loan Interest deduction for qualifying American-made vehicles.
The average deduction exceeded $1,800.
According to Treasury:
62% of claimants earned less than $100,000.
98% earned less than $200,000.
The deduction was included as part of the administration’s effort to encourage purchases of American-made automobiles.
Trump Accounts continue to expand
The legislation also created Trump Accounts to help families build long-term savings for children.
Treasury said more than 5.5 million accounts have already been opened.
Approximately 1.4 million children currently qualify for the government’s $1,000 pilot contribution, while 86% of all accounts belong to families earning less than $200,000 annually.
Most taxpayers continued using the doubled standard deduction
Treasury said the permanently doubled standard deduction remained one of the law’s most widely used provisions.
More than 127 million taxpayers, representing approximately 90% of all tax filers, claimed the standard deduction instead of itemizing.
Officials said the larger deduction continues to simplify filing while reducing taxable income for millions of households.
Independent analysts project stronger growth but larger deficits
Supporters argue the tax law will encourage hiring, investment and consumer spending by lowering taxes on work and investment.
A January analysis by the nonpartisan Tax Foundation concluded the legislation is likely to increase economic growth while also expanding federal budget deficits.
“Our modeling indicates the One Big Beautiful Bill Act will boost economic growth but increase deficits,” the group said.
The Tax Foundation projects the law will increase U.S. gross domestic product by 1.2% in 2026, 1.4% in 2027 and 1.5% in 2028, before settling into a long-run increase of roughly 1.2%.
Some households may not have noticed larger refunds
Although Treasury reported $82 billion in tax relief, many taxpayers may not have experienced significantly larger refunds.
Tax experts note that lower tax liability does not always translate into a bigger refund because many households instead paid less tax throughout the year.
Inflation also continued to pressure household budgets, meaning lower federal taxes may have been offset by higher prices for necessities such as housing, groceries and energy.
Many of the Working Families Tax Cuts; including the deductions for overtime pay, tips and auto loan interest; are currently scheduled to remain in effect through 2028.
Whether Congress ultimately extends those provisions will depend on future fiscal negotiations, projected costs and political support after lawmakers evaluate several years of taxpayer participation and economic impact.
Like Financial Freedom Countdown content? Be sure to follow us!
14 essential strategies to maximize your Social Security and avoid costly mistakes
Social Security is a vital lifeline for many seniors, providing crucial income support during retirement. With inflation at its highest in four decades, Social Security’s inflation-adjusted benefits offer protection against rising costs.
Rising interest rates have disrupted many retirement portfolios, causing bond fund values to plummet. In this volatile financial landscape, Social Security can stabilize a typical stock-bond retirement portfolio. By implementing smart strategies, retirees can maximize their Social Security benefits and ensure a more secure financial future.
14 Essential Strategies to Maximize Your Social Security and Avoid Costly Mistakes
11 reasons you should claim Social Security early
Deciding when to claim Social Security is often about maximizing your benefit. Financial planners usually advise delaying your claim for as long as possible to secure the highest monthly payment. Your benefit is based on your lifetime earnings, with a full payout available at your full retirement age (FRA), which is currently between 66 and 67 depending on your birth year. Claiming before FRA results in a permanent reduction in your monthly benefit, while waiting beyond FRA leads to a permanent increase. However, the decision isn’t solely about maximizing the monthly check. Personal factors such as health, family circumstances, and financial needs can play a significant role in determining the right time to claim.
11 Reasons You Should Claim Social Security Early
Did you find this article helpful? We’d love to hear your thoughts! Leave a comment with the box on the left-hand side of the screen and share your thoughts.
Also, do you want to stay up-to-date on our latest content?
1. Follow us by clicking the [+ Follow] button above,
2. Give the article a Thumbs Up on the top-left side of the screen.
3. And lastly, if you think this information would benefit your friends and family, don’t hesitate to share it with them!
John Dealbreuin came from a third world country to the US with only $1,000 not knowing anyone; guided by an immigrant dream. In 12 years, he achieved his retirement number.
He started Financial Freedom Countdown to help everyone think differently about their financial challenges and live their best lives. John resides in the San Francisco Bay Area enjoying nature trails and weight training.
Here are his recommended tools
Personal Capital: This is a free tool John uses to track his net worth on a regular basis and as a retirement planner. It also alerts him wrt hidden fees and has a budget tracker included.
Platforms like Yieldstreet provide investment options in art, legal, real estate, structured notes, venture capital, etc. They also have fixed-income portfolios spread across multiple asset classes with a single investment with low minimums of $10,000.
