Compliance
IRS Phase-Out of Paper Refund Checks: What You Must Know Now
Beginning September 30, 2025, most tax refunds will no longer be issued by paper check—secure your refund and avoid delays by moving to electronic methods before the change impacts you.
By NomadicTax Research Team • 5-8 min read • November 23, 2025
## What's Changing and Why
Under **Executive Order 14247**, the IRS will **phase out paper tax refund checks for individual taxpayers** starting **September 30, 2025**, to the extent permitted by law. ([irs.gov](https://www.irs.gov/newsroom/irs-to-phase-out-paper-tax-refund-checks-starting-with-individual-taxpayers?utm_source=openai)) The move is part of a broader effort to modernize payments to and from the Treasury. Electronic payment vehicles like **direct deposit**, prepaid cards, or digital wallets are the future. ([irs.gov](https://www.irs.gov/newsroom/irs-to-phase-out-paper-tax-refund-checks-starting-with-individual-taxpayers?utm_source=openai))
The IRS notes that paper checks are **far more vulnerable**—more likely to be lost, stolen, misdelivered or delayed compared with direct deposit. The change aims to protect taxpayers, speed up refunds (often under 21 days when direct deposit and return are error-free), and reduce costs. ([irs.gov](https://www.irs.gov/newsroom/irs-to-phase-out-paper-tax-refund-checks-starting-with-individual-taxpayers?utm_source=openai))
## Who Needs to Act Now
| Situation | Action Required |
|---|---|
| You already have direct deposit bank details | Confirm your account and routing numbers are correct when you file. |
| No bank account or unbanked | Explore free or low-cost banking options via FDIC's "Get Banked" resources and credit unions. Prepaid cards and digital wallets may also be options. ([irs.gov](https://www.irs.gov/newsroom/irs-to-phase-out-paper-tax-refund-checks-starting-with-individual-taxpayers?utm_source=openai))|
| Living abroad or banking issues | Look into international accounts that accept U.S. Treasury payments or explore IRS exceptions. |
| Paper check was your preferred method | Expect change; ensure you provide electronic payment information or qualify for exception by IRS guidance. |
## What Taxpayers Should Do to Prepare
- **Include direct deposit info** on your next tax return. Double-check numbers carefully.
- If qualifying, ensure prepaid card or digital wallet account has valid routing/account info.
- Open a U.S. bank account if possible before filing, or find institutions that enable refunds electronically even from abroad.
- Stay updated for IRS guidance on exceptions and any new payment mechanisms. ([taxpayeradvocate.irs.gov](https://www.taxpayeradvocate.irs.gov/news/tax-tips/tips-on-electronic-payment-options-available-to-taxpayers-as-the-irs-phases-out-paper-checks/2025/10/?utm_source=openai))
## Example Scenario
Sarah files her 2025 return in 2026. She’s always had her refund issued by check. Now, since she didn’t provide direct deposit info, IRS may send a paper check if no exception applies—but it's **delayed** and **six-weeks after filing** unless she updates her banking info. If she includes valid routing/account details, she’ll receive direct deposit, much faster and securely. ([taxpayeradvocate.irs.gov](https://www.taxpayeradvocate.irs.gov/news/tax-tips/tips-on-electronic-payment-options-available-to-taxpayers-as-the-irs-phases-out-paper-checks/2025/10/?utm_source=openai))
John lives abroad and uses a foreign bank that can’t accept U.S. Treasury direct deposit. He anticipates being able to use a digital wallet or may apply for exception under IRS guidance. He’s preparing in advance.
## Compliance Risks and Implications for Professionals
- Tax preparers need to ensure their clients are aware of the changes,
- Ensure account info is collected in time,
- Watch for guidance from IRS on exceptions and safe harbor for those who can’t meet new electronic requirements.
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*Category: Compliance | taxHome: US | author: NomadicTax Research Team | readTime: 5-8 min*