The IRS Is Eliminating Paper Refund Checks. Here’s What That Means for Taxpayers
Starting September 30, 2025, the Internal Revenue Service will no longer issue paper refund checks. Every federal tax refund will be delivered electronically, whether through direct deposit, prepaid debit cards, or approved digital wallets.
This change stems from a new federal mandate under Executive Order 14247, officially titled Modernizing Payments to and from America’s Bank Account. The order pushes all federal agencies toward fully electronic payment systems, with the IRS being one of the largest and most visible transitions.
For millions of taxpayers, this marks the end of an era.
Why the Government Is Doing This
This shift is not about convenience alone. It is driven by security concerns, operational efficiency, and cost reduction.
Paper checks are risky.
Mailed refunds are far more vulnerable to theft, loss, tampering, and fraud. According to federal data, paper payments are more than 16 times more likely to experience issues than electronic transfers. With digital refunds, funds are sent directly to verified accounts, drastically reducing exposure.
Electronic refunds are faster.
Taxpayers who e-file and use direct deposit usually receive refunds in under three weeks. Paper checks often take six weeks or more, especially during peak filing seasons.
Paper is expensive.
Printing, mailing, processing, and replacing lost checks costs the government millions of dollars annually. Electronic payments significantly reduce these administrative burdens.
Who Will Be Impacted
This initial phase applies to individual taxpayers. Roughly 6.5 million people still receive refunds by mail each year.
Beginning with the 2026 filing season, which covers 2025 tax returns, all refunds will be issued electronically. Paper filing is still allowed, but paper refunds will not be.
Taxpayers filing 2024 returns may still receive paper checks through the end of 2025. After that point, refunds will be digital-only.
How to Prepare
Most people will not notice much of a change, but those who rely on paper checks should prepare now.
Steps to take:
Confirm your bank account details on your next tax return or in your IRS online profile.
If you do not have a bank account, look into low-cost or free options.
Consider alternatives such as prepaid debit cards, the Treasury’s Direct Express Debit Mastercard, or digital wallets approved by the IRS.
Make sure your tax software or tax professional is ready for electronic-only refunds in 2026.
Waiting until tax season to handle this could slow your refund.
Are There Any Exceptions?
Yes, but they will be limited.
The executive order allows for exemptions in cases of severe hardship, lack of access to U.S.-based banking, or certain national security and law enforcement-related circumstances.
The Treasury Department is expected to release more detailed guidance before the 2026 filing season explaining how these exceptions will work.
This Is Just the Beginning
Refunds are only the first step. Federal officials have already signaled that tax payments themselves are likely to follow the same path.
That means estimated payments, balances due, and other IRS transactions may also become electronic-only by 2027 or shortly thereafter.
The Bottom Line
The IRS is modernizing its systems whether taxpayers are ready or not. Paper checks are being phased out, and digital payments are becoming the default.
For most people, this will mean faster refunds and fewer problems. For those who wait to adapt, it could mean delays and frustration.
The smart move is to prepare now.
This content is for informational purposes only and should not be considered investment advice. Past performance does not guarantee future results. Investing involves risk, including possible loss of principal.
