A major change in IRS policy could mean significantly larger tax refunds for millions of Americans starting in July 2025. The IRS has updated income thresholds, deduction limits, and credit eligibility guidelines to offer expanded support during times of inflation and economic adjustment. If you’ve already filed your taxes or plan to soon, it’s worth understanding how these updates could put more money in your pocket.
What the New IRS Rule Covers
The IRS rule revision for July 2025 focuses on adjusting the standard deduction, expanding Earned Income Tax Credit (EITC) eligibility, and boosting refundable credits like the Child Tax Credit (CTC). These updates mean that even taxpayers with lower earnings may qualify for higher refunds than they did previously. Notably, part-time workers, gig workers, and retirees with limited income will benefit the most under this rule change. Refund caps have also been raised for certain categories of filers.
Refund Timeline and Distribution Details
Refunds reflecting the new IRS rule will begin processing from July 18, 2025, with most direct deposits hitting bank accounts between July 20 and July 31, 2025. Eligible taxpayers will not need to refile or resubmit forms if they’ve already completed their 2024 tax returns. Instead, the IRS will automatically recalculate owed amounts and issue the difference as an adjusted refund. Those who haven’t filed yet can still benefit from the updated rule when submitting their returns.
| Refund Details | Information |
|---|---|
| Start Date for Updated Refunds | July 18, 2025 |
| Average Refund Increase | $300 – $1,200 |
| Applies To | 2024 tax returns |
| Eligibility Review | Automatic (if return already filed) |
| Payment Method | Direct Deposit / Check |
| Final Deadline to Claim | October 15, 2025 |
Who Benefits the Most?
This IRS rule mainly helps low to middle-income households, especially those with children or part-time jobs. Individuals earning under $55,000 annually could see their refund increase by hundreds of dollars. Retirees, unemployed individuals, and those who received minimal refunds earlier this year are also among the primary beneficiaries. If your income changed significantly during 2024, this rule change could now make you eligible for credits you were previously denied.
With the IRS’s new rule now in effect, July 2025 could bring welcome news to taxpayers in need of financial relief. Refund amounts are increasing for millions due to broader credit eligibility and revised deduction rules. If you’ve already filed, check your refund status in the IRS portal. If you haven’t filed yet, submit your return by October 15 to take advantage of this major refund boost.
FAQ’s:
1. Do I need to refile my taxes to get the extra refund?
No, if you already filed, the IRS will automatically recalculate and send the additional refund if you qualify.
2. What if I haven’t filed my 2024 taxes yet?
You still have time. File by October 15, 2025, to be eligible for the increased refund under the new rule.
3. How much more money could I get from this update?
Most qualifying taxpayers could receive between $300 and $1,200 more, depending on income and credits.
4. Will everyone get a bigger refund?
No. The boost mainly applies to those with low-to-moderate income or those with dependents.
5. Where can I track my refund status?
You can use the IRS’s “Where’s My Refund” tool to track any changes or deposits related to your refund.
