The Internal Revenue Service is officially phasing out paper refund checks, beginning with tax returns filed in 2026 for the 2025 tax year. Under Executive Order 14247, the move aims to make federal payments faster, safer, and more efficient by requiring most taxpayers to use direct deposit or other electronic payments.
The IRS says that by early 2026, nearly all tax refunds will be delivered electronically through direct deposit or other approved digital methods. According to the agency, about 93% of individual refund recipients already receive electronic funds transfers into their bank accounts.
For the remaining 7% of taxpayers who still receive paper checks, this change will be significant. The IRS will require taxpayers to include direct deposit information when they e-file their 2025 tax return. Those who fail to do so could face refund delays of up to six weeks while the agency verifies their banking information or issues a paper check under limited exceptions.
An IRS notice explained, “Electronic delivery reduces the risk of stolen or altered refund checks and ensures taxpayers get their money more quickly.” The Treasury Department and other federal agencies are expected to follow similar procedures for future payments.
To prepare for this transition, taxpayers should confirm that their bank account and routing numbers are accurate before filing. Refunds are typically delivered within 21 days when a tax return is e-filed and the deposit information is correct. If banking details are wrong or incomplete, refunds can be rejected or delayed for weeks.
The IRS recommends that anyone without a bank account open one with a financial institution or credit union as soon as possible. Resources are available at FDIC.gov/getbanked and MyCreditUnion.gov to help individuals obtain free or low-cost accounts. The agency has also outlined plans to support digital wallets and prepaid debit cards for individuals who are unable to use traditional banking services.
Taxpayers can use their IRS online account to review previous deposits, update banking information, or request additional guidance once new procedures are launched ahead of the 2026 filing season.
While most refunds will be processed through electronic payments, the IRS acknowledges that some taxpayers may require exceptions. According to the National Taxpayer Advocate, exemptions may apply to individuals without access to financial institutions, Americans living abroad, or victims of domestic violence who need to protect their financial privacy.
If a taxpayer cannot receive an electronic funds transfer, the IRS will hold the refund for six weeks before issuing a paper check. The agency will send a letter explaining the reason for the delay and provide a phone number for further information. Additional guidance will be published at IRS.gov once the new process begins.
To avoid refund delays, taxpayers should act early. Verify your banking information, update your IRS online account, and file electronically. Many taxpayers who still receive paper refund checks should begin transitioning now to ensure smooth processing in 2026.
The IRS has warned that mail delivery issues, missing or altered checks, and refund theft have caused inefficiencies in previous filing seasons. Electronic payments address these risks and facilitate faster, safer, and easier refunds to track.
“Taxpayers can expect faster refunds and fewer problems when payments go directly into verified accounts,” the IRS said in a statement. “We will continue to provide additional guidance and tools as implementation proceeds.”
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