By PYMNTS Intelligence
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Money back from the Treasury Department in this year’s tax filing season isn’t likely to help the nearly 70% of Americans who live paycheck to paycheck, a trend increasingly driven by financial necessity, not choice of lifestyle.
Financial strain is persistent across the United States, and the annual tax season—and refunds that come with it—aren’t likely to provide much relief. Roughly two-thirds of American consumers continue to live paycheck to paycheck in early 2026, with little sustained improvement. Within this group, roughly 40%–45% report comfortably paying their monthly bills, while 20%–25% consistently struggle, indicating that a large share of households have little financial slack amid inflation, higher living costs and tariffs. At the same time, the composition of paycheck-to-paycheck living has shifted. Over time, people living this way due to financial necessity have overtaken those living paycheck to paycheck by choice, suggesting that economic pressure—rather than lifestyle preferences—is increasingly driving financial vulnerability.
In theory, tax refunds and one-time government payments could play outsized roles in bolstering household budgets. But paycheck-to-paycheck consumers, especially those struggling to pay bills, are less likely to receive refunds. When they do, they overwhelmingly use the money to cover everyday expenses or repay debt. By contrast, financially stable consumers receive tax refunds more consistently and are far more likely to save or invest them, reinforcing existing gaps in financial resilience.
These are just some of the findings detailed in “Tax Refund Season Reveals the Reality of Paycheck-to-Paycheck America,” the newest installment of the PYMNTS Intelligence exclusive series New Reality Check: The Paycheck-to-Paycheck Report. This edition examines who receives tax refunds, how they use them and how preferences differ between tax refunds and one-time government payments—especially across paycheck-to-paycheck personas and financial lifestyles. It draws on insights from a survey of 2,432 U.S. adult consumers conducted from Jan. 15, 2026, to Jan. 29, 2026.