Tax Season 2026: Opportunity for Collections and Loan Servicers
Moveo AI Team
February 5, 2026
in
🏆 Leadership Insights
The IRS opened e-filing on January 26, 2026. For collections operations and loan servicers, this marks the beginning of the highest-ROI recovery window of the year. Miss it, and you wait another 12 months.
Tax season 2026 is not just another filing cycle. The One Big Beautiful Bill Act (OBBBA), signed into law in July 2025, introduced sweeping changes that will put more money into consumers' pockets this spring. The White House projects this to be the largest tax refund season in U.S. history.
The numbers tell the story. The IRS expects to process approximately 164 million individual income tax returns this year. According to Morgan Stanley economists, refunds could increase by 15-20% on average. Oxford Economics analysis suggests total taxpayer savings could amount to an additional $50 billion through bigger refunds.
The OBBBA permanently extended and enhanced many provisions from the 2017 Tax Cuts and Jobs Act. But several new provisions are what matter most for predicting who will receive larger refunds.
Higher Standard Deductions: According to Tax Foundation data, single filers now receive a $15,750 standard deduction. Married couples filing jointly get $31,500. Heads of household receive $23,625. These increases push more income into a zero-tax bracket.
No Tax on Tips: Service industry workers can now deduct up to $25,000 in qualified tips, as detailed by TurboTax. This applies to workers with modified adjusted gross income under $150,000 (single) or $300,000 (joint).
No Tax on Overtime: W-2 employees can deduct up to $12,500 in overtime wages (single) or $25,000 (joint). Workers who regularly exceed 40 hours will see meaningful tax savings.
Enhanced Senior Deduction: Taxpayers 65 and older qualify for an additional $6,000 deduction per person, according to H&R Block analysis. This phases out at a 6% rate for income above $75,000 (single) or $150,000 (joint).
Expanded Earned Income Tax Credit: The maximum EITC for families with three or more children reaches $8,231 in 2026. This is a prime settlement opportunity for low and moderate-income borrowers.
Increased Child Tax Credit: The maximum CTC increased to $2,200 per qualifying child and will be adjusted for inflation moving forward.
The Tax Foundation estimates these individual tax changes will reduce revenue by $129 billion in 2025. Because the IRS did not adjust withholding tables after the law passed, workers continued to withhold more taxes than required. The result: larger refunds when they file.
The consumer Debt Landscape: Why this matters now
These larger refunds arrive at a moment of significant consumer financial stress. According to the Federal Reserve Bank of New York's Quarterly Report, total household debt reached $18.2 trillion in Q1 2025. Credit card balances alone crossed $1.18 trillion, growing 6% year-over-year.
Delinquency rates are climbing across categories. The NY Fed data shows aggregate delinquency rates increased to 4.3% of outstanding debt. Student loan delinquency spiked to 8.19%, up from 0.87% the previous quarter, as reported by The Kaplan Group analysis. This represents an 841% increase driven by federal student loan payment resumption.
The stress is not evenly distributed. FTI Consulting research highlights that while the severe delinquency rate on total consumer debt remains at about 3.0% (below the long-term average of 3.8%), this figure masks significant distress in specific categories. Americans are staying current on mortgages but falling behind on credit cards, auto loans, and student debt.
Younger borrowers face the greatest challenges. The Kaplan Group found that 18-29 year-olds had the highest serious delinquency rate at 3.35% in Q1 2025, nearly double the rate of those aged 70 and older.
Tax refunds as a Liquidity Event: The numbers that matter
Tax refunds represent predictable, lump-sum liquidity events. Research consistently shows that consumers prioritize debt repayment when these funds arrive.
According to a Bankrate survey, 28% of Americans expect a tax refund plan to use it to boost savings, while 19% plan to pay down debt. Experian research found that debt payoff is most pronounced among taxpayers ages 55 to 64, with 29% planning to use their refund to reduce outstanding balances.
The JPMorgan Chase Institute provides granular data: about one-fifth of the expenditure response within the first week of receiving a tax refund represents families paying down bills, mostly credit card and healthcare bills. Families put off spending and accrue credit card debt while waiting for refunds to arrive.
A TaxSlayer survey found that 80% of taxpayers who spent their refunds used the money for necessities like bills, groceries, credit card debt, and home repairs. Only 15% spent on luxuries.
Perhaps most significantly, Credit Karma research found that 49% of taxpayers are more dependent on their tax refund to make ends meet this year than in years past. Among those who have already spent their refunds, 41% used the money for necessities while 35% used it to pay down debt.
The window is narrow. The IRS issues most refunds within 21 days for e-filed returns. EITC and Additional Child Tax Credit refunds are expected to be available by March 2, 2026 for taxpayers who chose direct deposit. The concentration of liquidity is intense and brief.
The collections industry faces a defining moment. Our research quantifies exactly how much is at stake. Read the full report: $7.5B Opportunity, How AI Could Recover 35% of Delinquent Debt by 2027.
Strategic approaches for Collections and Loan Servicers
Capturing tax season recovery requires preparation that begins now, not when refunds start landing.
Build Refund-Likelihood Scores
Not all borrowers will receive significant refunds. The key is identifying which segments are most likely to receive meaningful funds.
Consider: filing status and dependents (married with children suggests higher likelihood of EITC/CTC), income bands (low-to-moderate income indicates EITC eligibility), past tax-season payment behavior (did they pay during prior tax seasons), and age (65+ taxpayers benefit from the new senior deduction).
Segment Portfolios by Opportunity Level
Different segments require different strategies. High refund-likelihood accounts with small balances are ideal for settlement-first approaches with time-limited offers.
Moderate refund-likelihood accounts may respond better to flexible payment-matching or plan-first approaches. Low ability-to-pay segments, particularly those losing ACA premium tax credits, may need hardship programs and longer-term forbearance.
Prepare for Volume
Peak weeks run from late February through early April. This requires advance preparation: dialer limits and channel mix calibration across email, SMS, and voice; compliance-ready scripts for FDCPA, CFPB, and TCPA requirements; staffing ramps so human agents focus on complex negotiations while automated systems handle routine follow-ups.
Learn more → Debt Collection Practices & FDCPA: An Enterprise AI Guide
Why AI agents are essential for Tax Season
The traditional collections model faces a structural constraint. Contact center capacity is the bottleneck. Answer rates for unknown numbers have dropped below 15% according to industry data cited by Moveo.AI research. Consumers inundated with spam calls have developed reflexive protection mechanisms.
The National Taxpayer Advocate report noted that IRS customer service representatives shrank by 22% in 2025. Collections operations face similar workforce pressures. Scaling headcount to meet tax season volume spikes is increasingly impractical.
AI agents with memory capabilities address this constraint directly. They provide 24/7 coverage across voice and digital channels without the linear relationship between capacity and cost. More importantly, they learn from each interaction. When a borrower indicates they received their refund, the system can immediately adjust the conversation toward resolution.
The compounding effect matters. Each tax season interaction adds to the system's understanding of borrower behavior patterns, optimal contact timing, and effective resolution approaches. This intelligence compounds over time, improving recovery rates with each cycle.
Compliance automation is equally critical. Tax season brings heightened scrutiny. The CFPB's annual report documented complaint volumes nearly doubling year-over-year. AI systems ensure every disclosure, consent, and attempt is logged and audit-ready.
Timeline: What happens When
January 26, 2026: IRS opens e-filing. Early filers begin submitting returns.
February 21, 2026: Where's My Refund provides projected deposit dates for most early EITC/ACTC filers.
March 2, 2026: Most EITC and Additional Child Tax Credit refunds are available in bank accounts.
Late February through Early April: Peak refund disbursement period. Highest-ROI window for collections outreach.
April 15, 2026: Filing deadline. Refund volume tapers significantly.
The bottom line
Tax season 2026 presents a unique convergence: larger-than-normal refunds meeting elevated consumer debt levels. The borrowers most likely to receive significant refunds, including service workers, overtime earners, seniors, and families with children, overlap substantially with populations experiencing financial stress.
The operational question is not whether to prioritize tax season. It is whether your systems and processes can capture the opportunity at scale. Manual approaches cannot match the volume. Traditional contact center models cannot achieve the coverage. The window is too narrow, the consumer behavior too concentrated.
Collections operations that deploy AI agents with memory, that learn from each interaction and compound that intelligence over time, will capture recovery that others miss. The difference between being first in line and waiting another year is measured in weeks, not months.
The refunds are coming. The question is: will you be ready?
See how a leading Southeast European bank transformed their collections operations with AI agents that learn from every interaction. Read the case study.