On September 23rd, 2025, the IRS announced that starting September 30th, 2025, they will begin phasing out paper checks for tax refunds to individual taxpayers. This is part of a broader federal push under Executive Order 14247, which mandates that federal disbursements and receipts move toward electronic payments wherever legally possible.
What’s Changing and Why:
- No more mailed refund checks (in most cases). Many taxpayers who used to receive paper checks will now get refunds via direct deposit, prepaid debit cards, electronic wallets, or other secure digital methods.
- Faster, safer, cheaper. The IRS emphasizes that “paper checks are over 16 times more likely to be lost, stolen, altered, or delayed than electronic payments.”. Digital refunds also tend to be processed more quickly (under 21 days in many cases) compared to weeks or months for mailed checks.
- Exceptions will exist. The IRS doesn’t expect to eliminate paper checks for every taxpayer. Limited exceptions will be made for those who lack access to banking, who would suffer undue hardship, or in other special circumstances.
What Taxpayers Need to Know:
- Verify your banking information. If you already use direct deposit, confirm your account and routing numbers are current.
- Open a bank or financial account if needed. Those without bank access should consider low‑cost or free accounts to receive refunds electronically.
- Watch for IRS communications: When you file your return, you may receive a notice asking for your banking information if it’s missing or incomplete.
- File as usual, for now: Until the IRS releases detailed 2025 tax return guidance, keep using existing forms, procedures, and workflows.
- Be especially vigilant if you’re unbanked. The IRS is working on alternatives (prepaid cards, digital wallets) for taxpayers without traditional accounts.
What to expect for the 2026 tax season and beyond:
- The IRS plans to expand the digital refund system more fully in the 2026 tax filing season.
- If a taxpayer does not respond to a request for banking information, the IRS may hold the refund temporarily before processing.
- Additional guidance will be provided later on by the IRS that will clarify how business filers, amended returns, international taxpayers, or those in complex situations will be handled.
This shift marks a significant modernization of tax refunds. Most people already use direct deposit, so it will feel seamless. But for those who rely on mailed checks or who don’t have banking access, it’s critical to make preparations now so refunds aren’t delayed or lost when filing a tax return in the upcoming 2026 season.
If you would like know more about the details of this announcement from the IRS, you can visit theirs news release at the following link: IRS to phase out paper tax refund checks starting with individual taxpayers