Compliance
Navigating the Phase-Out of Paper Refund Checks: IRS’s Shift to Digital
Starting September 30, 2025, paper tax refund checks for individuals will be largely phased out under Executive Order 14247, transitioning refunds toward electronic payments to enhance security and speed.
By NomadicTax Research Team • 5-8 min read • November 19, 2025
## What’s Changing?
The U.S. Treasury Department and IRS are implementing **Executive Order 14247, “Modernizing Payments To and From America’s Bank Account”**, which mandates phasing out paper tax refund checks for individual taxpayers **beginning 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))
Under the new policy:
- Refunds will **default to direct deposit** or other electronic methods wherever possible.([irs.gov](https://www.irs.gov/newsroom/irs-to-phase-out-paper-tax-refund-checks-starting-with-individual-taxpayers?utm_source=openai))
- Taxpayers without bank account info may use **prepaid debit cards**, digital wallets, or apply for **limited exceptions**.([irs.gov](https://www.irs.gov/newsroom/irs-to-phase-out-paper-tax-refund-checks-starting-with-individual-taxpayers?utm_source=openai))
- There’s no change yet to how taxpayers pay their taxes. Electronic payment mandates for payments is expected later—possibly by **2027 or beyond**.([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))
## Who This Impacts Most
Vulnerable or marginalized taxpayers are likely to feel the impact the most. This includes:
- **Unbanked or under-banked households** without checking/savings accounts.
- **Americans living abroad**, who may struggle with U.S. banking infrastructure.
- **Those with religious objections**, or people in remote/rural areas.
- Individuals who need electronic options but lack access to tech or stable internet.([taxpayeradvocate.irs.gov](https://www.taxpayeradvocate.irs.gov/news/nta-blog/as-the-irs-phases-out-paper-checks-vulnerable-taxpayers-must-not-be-left-behind/2025/10/?utm_source=openai))
## What Taxpayers Need to Do Now
- **Provide bank account info** on 2025 returns: routing & account numbers. Double-check them.
- For multiple accounts, use **Form 8888** to split the refund among up to three accounts.
- If unable to provide these or qualify for an exception, expect delays or a mailed check **once required waiting periods pass**.([taxpayeradvocate.irs.gov](https://www.taxpayeradvocate.irs.gov/news/nta-blog/as-the-irs-phases-out-paper-checks-vulnerable-taxpayers-must-not-be-left-behind/2025/10/?utm_source=openai))
- Stay tuned for upcoming IRS guidance on exceptions and alternative delivery methods.
## Example Scenarios
- **Sarah**, with no bank account, files without direct deposit info. The IRS sends a letter asking for account info, then waits ~30 days; if none is provided, a paper check may be issued after six weeks.
- **Tom**, married filing jointly, has bank details on return. Refund is direct deposited—faster, more secure, less risk of loss.
## Risks & Tips to Avoid Delays
- Mistyped or invalid banking information results in rejected direct deposit. This triggers delay & IRS letter.
- Missing exception documentation/application can cause frustration. Start early, keep copies.
- Keep address/contact info up to date to receive IRS notices promptly.
## Bottom Line
This is a major modernization geared toward efficiency and transparency. Providing direct deposit info correctly for the 2025 tax year will be central to avoiding delays. For vulnerable populations, exceptions will be key—IRS guidance is on the way.