Bank of America says filers are getting more money back from Uncle Sam this tax season, which bodes well for the stock market. Tax season has been well underway since it started on January 26th, with the average tax refund check through February 13th being $2,476. That’s a 14.2% increase from the previous year, according to Internal Revenue Service data. Analysts at Bank of America expect refund checks to continue to increase compared to last year. “As tax season continues due to changes to the One Big Beautiful Bill Act, we believe the difference in refunds compared to 2025 will become even larger,” analyst Lorraine Hutchinson said in a report Wednesday. Bank of America revealed that provisions in the “Big and Beautiful Bill” could provide an average stimulus check of about $1,000 per household come tax season. Key measures include increased limits on state and local tax deductions and a new deduction for overtime pay. The bank found that these two breaks in particular accounted for about half of the stimulus package, leading to larger tax refunds and lower tax payments. Regardless of whether taxpayers spend or save money, some stocks could benefit. “Clothing was the biggest beneficiary of tax refund spending for low-income households last year,” Hutchinson said. “We believe this means that retailers serving low- and moderate-income consumers will experience the greatest growth in 2026.” The analyst named Ross Stores as a buy with upside potential. Roth, which just hit a 52-week high on Friday, is up nearly 12% since the beginning of the year. The current dividend yield is 0.8%. Consensus price targets for each LSEG suggest that Ross stock may be running out of steam, predicting a 1% decline from current levels. Still, 13 out of 19 analysts rate the name as a “buy” or “strong buy.” “We believe Ross deserves to trade at a premium to specialty retailers given its ability to generate significant profits, its track record of growth despite economic fluctuations, its potential for significant new store growth, and its history of returning excess cash to shareholders through stock buybacks and dividends,” Hutchinson wrote. The analyst also likes Burlington Stores, which has a Buy rating. Wall Street is bullish on the name, with the stock up more than 8% in 2026. The consensus price target calls for nearly 10% upside from current levels. Spending and Savings Mihir Bhatia, an analyst at Bank of America, said customers who are feeling high may be more likely to use their refunds to pay off big-ticket items or outstanding debts. More than a third of participants in a survey on annual payment priorities said they expected to use their tax refunds to pay off debt, according to a separate report Wednesday from Bank of America. A further 13% expect to keep the money stashed away in savings. This could be a boon for Synchrony Financial, which has a buy rating, Bhatia said. Although the stock is down nearly 13% in 2026, Wall Street remains positive on the stock, with the consensus price target suggesting a 25% upside from current levels, according to LSEG. 17 out of 23 analysts rate the stock as a buy or strong buy. Synchrony’s current dividend yield is approximately 1.7%. “The upside risk is that consumer balance sheets remain strong and credit metrics remain strong,” Bhatia said. The analyst also expects Bread Financial, which is rated a buy, to benefit. The stock price growth rate this year is just under 2%, and the dividend yield is 1.2%. Analysts surveyed by LSEG primarily rate the stock as a holding, but the consensus price target calls for an upside of 10% or more. —CNBC’s Michael Bloom contributed reporting.
