According to the Grok AI
"How It Would Happen
The mechanism revolves around the bill's tax provisions, which reduce taxable income and thus lower overall tax liability for 2025, leading to refunds if withholding exceeded the final owed amount. Key changes include:Increased standard deductions.
Expanded child tax credit.
Raised cap on state and local tax (SALT) deductions.
New deductions for tips (up to $25,000 for 2025-2028, phasing out for higher earners), overtime (up to $12,500, similar phase-out), car-loan interest, and a $6,000 deduction for seniors (phasing out and expiring in 2028).
Partial elimination of taxes on Social Security benefits (increasing the share of over-65 beneficiaries paying none from 64% to 88%, though not fully for all or under-65 recipients).
These are estimated to deliver $125 billion in total tax cuts for 2025, or about $650 per taxpayer on average.
If taxpayers didn't adjust their W-4 forms mid-year to account for the lower liability, they'll overpay throughout 2025 and reclaim the difference via refunds in early 2026. Hassett noted this withholding mismatch amplifies the refund effect, similar to 2018 after the 2017 Tax Cuts and Jobs Act.The $11K-$20K savings figure appears tailored to specific scenarios, such as middle- to upper-income families maximizing multiple deductions (e.g., with children, tips/overtime income, or high SALT). However, it's not an average—fact-checks indicate 91% of higher-income households could see cuts averaging $2,300, while only 16% of the bottom income quintile benefit at all, with refunds skewed toward wealthier filers.
