The IRS just announced a major change that will affect millions of Americans: paper tax refund checks are being phased out starting September 30, 2025. If you're among the 7% of taxpayers who still receive refunds by mail, you need to act now to ensure you get your money without delays, loss, or theft.
This sweeping change, mandated by Executive Order 14247, marks the federal government's aggressive push toward fully electronic payments. While most taxpayers already receive direct deposits, those who rely on paper checks—often the elderly, unbanked, or those living in rural areas—face an urgent need to prepare for this transition.
Why Is the IRS Ending Paper Tax Refund Checks?
The decision to phase out paper tax refund checks isn't arbitrary. According to the IRS, paper checks are more than 16 times more likely to be lost, stolen, altered, or delayed compared to electronic payments. The agency cites three primary reasons for eliminating paper refund checks:
Protection Against Fraud and Theft: The U.S. Postal Inspector Service recovers over $1 billion in counterfeit checks and money orders annually. Paper refund checks are vulnerable to mail theft, a crime that has skyrocketed in recent years. Criminals can intercept checks, alter them, and cash them before victims even realize their refund never arrived.
Faster Access to Your Money: Electronic refunds arrive in less than 21 days when you file electronically and choose direct deposit, with no issues on your return. In contrast, paper refund checks can take six weeks or longer to arrive by mail. That's a significant difference when you're counting on that money.
Cost Efficiency: Electronic payments cost the government—and ultimately taxpayers—far less to process than printing, mailing, and handling millions of paper checks each year.
What This Means for Taxpayers Still Receiving Paper Refund Checks
During the 2025 filing season, the IRS issued more than 93.5 million refunds to individual taxpayers. Of those, 93% (nearly 87 million) were delivered via direct deposit. However, that still leaves approximately 6.5 million taxpayers who received paper checks.
If you're one of those taxpayers, here's what you need to know:
Filing Procedures Remain Unchanged: You'll continue to file your tax return exactly as you have before, using your preferred method—whether that's through a tax professional, online software, or paper forms.
Refund Delivery Goes Digital: Your refund will now be delivered electronically through direct deposit into your bank account, or through alternative electronic methods like prepaid debit cards or digital wallets.
Limited Exceptions Will Apply: The IRS has stated it will issue a "limited number" of paper checks in cases where no alternative is available, such as for individuals who truly lack access to banking services or where electronic disbursement would cause undue hardship.
How to Switch from Paper Refund Checks to Direct Deposit
Making the transition from paper refund checks to electronic payment is straightforward, but it requires action on your part. Here's what you need to do:
Provide Your Bank Information When Filing: When you file your 2025 tax return (due in early 2026), you'll need to include your bank's routing number and your account number. This information appears at the bottom of your checks or can be obtained from your bank.
Open a Bank Account If You Don't Have One: For the unbanked, now is the time to explore your options. The FDIC's GetBanked program (FDIC.gov/getbanked) and MyCreditUnion.gov can help you find free or low-cost checking accounts. Many banks and credit unions offer accounts with no minimum balance requirements and no monthly fees.
Consider Alternative Electronic Options: If opening a traditional bank account isn't feasible, the IRS will offer alternatives such as:
- Prepaid debit cards that can be loaded with your refund
- Digital wallet options
- Other secure electronic payment methods
Act Before the 2026 Filing Season: The IRS will publish detailed guidance for 2025 tax returns before the 2026 filing season begins. However, waiting until the last minute could create complications and delays in receiving your refund.
Important Considerations for the Tax Refund Checks Phase-Out
Extension Filers Filing Before December 31, 2025: If you filed for an extension and are filing your 2024 tax return with a due date prior to December 31, 2025, you should continue using existing forms and procedures. However, if you file after September 30, 2025, you should include banking information to avoid significant delays.
Outstanding Refunds from Previous Years: If you're still waiting for a refund from 2024 or earlier years because your return is stuck in processing, examination, appeals, or litigation, the IRS is legally obligated to issue your refund—even if that requires sending a paper check. However, expect potential complications and longer wait times.
Payments to the IRS: The executive order also applies to payments made to the IRS. For now, the agency says taxpayers should continue using existing payment options, including checks. Additional guidance will be issued before changes are implemented.
Concerns About Ending Paper Tax Refund Checks
Tax advocacy groups have raised legitimate concerns about the rushed timeline for phasing out paper refund checks. The Center for Taxpayer Rights and other organizations warn that:
Vulnerable Populations May Be Left Behind: The elderly, disabled, those in rural areas with limited broadband access, and individuals without bank accounts may struggle to navigate the transition to electronic payments.
Confusion About Prepaid Debit Cards: Unlike monthly Social Security payments, tax refunds are annual. Taxpayers may not understand they need to keep IRS-issued prepaid debit cards for the following year, potentially losing access to their funds.
Millions Are Still Waiting for Refunds: Many taxpayers who filed their 2024 returns on time are still waiting for refunds due to processing backlogs. The October 15, 2025 extension deadline means thousands more returns haven't even been filed yet.
Despite these concerns, the September 30, 2025 deadline is approaching quickly.
What Taxpayers with Tax Problems Should Do Now
If you have unfiled returns, outstanding tax debt, IRS liens, or other tax problems, the shift away from paper refund checks adds another layer of urgency to resolving your situation. Here's why:
Future Refunds May Be Offset: If you owe back taxes or have other federal debts like student loans in default, your refunds will be automatically offset to pay those debts—whether electronic or by paper check. Resolving your tax debt now can prevent losing future refunds.
Bank Account Levies: If the IRS knows your bank account information because you've provided it for direct deposit, that same account becomes vulnerable to IRS levies if you have unpaid tax debt. It's critical to address outstanding liabilities before they escalate.
Compliance Issues: If you have unfiled returns from previous years, you're not in compliance, which can complicate everything from getting loans to receiving refunds. The IRS may refuse to process your current-year return until you've filed all required prior-year returns.
Get Expert Help Navigating Tax Refund Changes and Resolving Tax Debt
The end of paper tax refund checks is just one more complication in an already complex tax system. If you're dealing with unfiled returns, back taxes, wage garnishments, or IRS liens, don't wait until these changes create even bigger problems for you.
Tax Problem Solver has over 41 years of experience helping clients resolve tax debt, negotiate settlements for pennies on the dollar, and get back into compliance. Our team of tax attorneys, CPAs, and Enrolled Agents understands how to navigate IRS procedures and protect your interests.
Whether you need help resolving outstanding tax debt, or filing years of unfiled returns, we can help. Contact Tax Problem Solver today for a free consultation and let us make your tax problems disappear—so you don't have to face them alone.
You can contact me by one of the methods below in the blue box, or email me at Larry@TaxProblemSolver.com and we can review your specific issues and solve them. You can also click here to book a free consultation.
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