Compliance
Compliance Essentials When Paper Checks for Refunds Are Phased Out
Starting September 30, 2025, IRS will stop issuing paper checks for tax refunds. Here's what taxpayers need to do to ensure smooth refunds and avoid delays.
By NomadicTax Research Team • 5-8 min read • November 18, 2025
## What’s Changing: Phasing Out Paper Refund Checks
On September 30, 2025, the IRS will begin phasing out paper tax refund checks for individual taxpayers, under **Executive Order 14247**. Individuals will need to rely on **electronic methods** like direct deposit or digital wallets, though some exceptions will apply. ([irs.gov](https://www.irs.gov/newsroom/irs-to-phase-out-paper-tax-refund-checks-starting-with-individual-taxpayers?utm_source=openai))
Key points:
- **Faster refunds** with direct deposit (often within 21 days) rather than 4-6 weeks via mail. ([irs.gov](https://www.irs.gov/newsroom/irs-to-phase-out-paper-tax-refund-checks-starting-with-individual-taxpayers?utm_source=openai))
- **Protection against fraud**, delays, or lost checks. Paper checks are over 16× more likely to be compromised. ([irs.gov](https://www.irs.gov/newsroom/irs-to-phase-out-paper-tax-refund-checks-starting-with-individual-taxpayers?utm_source=openai))
- **Support for the underserved**: There will be alternatives for those without bank accounts, such as prepaid cards or digital wallets. ([irs.gov](https://www.irs.gov/newsroom/irs-to-phase-out-paper-tax-refund-checks-starting-with-individual-taxpayers?utm_source=openai))
## What Taxpayers Should Do to Stay Compliant
- **Provide bank account info when filing**: Include routing and account numbers accurately. Double-check this data—mistakes delay refunds.
- **Open a bank account if you don’t have one**: Look into free or low-cost banks, credit unions, or alternatives. Resources via FDIC and NCUA can help. ([irs.gov](https://www.irs.gov/newsroom/modernizing-payments-to-and-from-americas-bank-account?utm_source=openai))
- **Understand exceptions**: Some taxpayers may qualify for alternate arrangements if they cannot use bank/digital deposit systems. Review IRS guidance for allowable methods.
## Action Steps Before the Deadline
- For returns due in the 2026 filing season (i.e. for tax year 2025), ensure you switch from paper refund requests to electronic where possible.
- Review previous returns to see how refunds were handled and update your preferred method.
- If you use a tax preparer, ensure they know about this change and have your up-to-date banking info.
## Example Situations and Risks
- **Maria**, self-employed, files her 2024 return in early 2025 and used paper refund checks last time. Come Sept 30, 2025, her electronic filing for 2025 must designate direct deposit or equivalent to avoid paper check delays.
- **No bank account?** Juan doesn’t have one. He applies early for a prepaid debit or digital wallet that meets IRS criteria to receive refunds electronically before the deadline.
**Takeaway**: If you haven’t switched to an electronic refund method yet, now’s the time. With the phase-out of paper checks, planning ahead prevents disruptions, delays, and unnecessary risk.