Overview
In line with Executive Order 14247—“Modernizing Payments to and From America’s Bank Account”—the U.S. Treasury and IRS have announced that, beginning September 30, 2025, paper tax refund checks for individual taxpayers will be phased out, to the extent permitted by law. (irs.gov) This change aims to improve security, reduce fraud, speed up refunds, and lower costs. (irs.gov)
What This Means for Individuals
- Filing stays the same: Tax returns should be filed as usual—with electronic, paper forms, or via tax professional. What changes is how refunds are delivered. (irs.gov)
- Refunds will be delivered via direct deposit or other secure electronic options. Paper checks will be limited to cases where electronic delivery isn’t feasible. (irs.gov)
- For those without bank access, prepaid debit cards, digital wallets, or potentially exceptions will be available. (irs.gov)
Preparing Ahead: Actionable Steps
- Provide banking info: When filing your tax return, include routing and account numbers for where your refund should go. Double-check correctness.
- Open a bank/checking account if unbanked or underbanked. Utilize FDIC’s GetBanked and similar programs. (irs.gov)
- Use Form 8888 if you’d like to split your refund among several accounts. Most tax software supports this. (taxpayeradvocate.irs.gov)
- Stay alert to IRS communications** in case your return lacks direct deposit information—IRS may request it. After a certain period (≈ six weeks), paper check issuance may occur to avoid interest accrual. (taxpayeradvocate.irs.gov)
Exceptions & Special Considerations
- Taxpayers abroad or lacking access to U.S.-based banking may be eligible for an exception.
- Some electronic wallets or prepaid debit cards may not support traditional direct deposit if routing/account numbers aren’t standard. Confirm with provider.
- Paper check phase-out pertains to refunds; separate policy governs payments to the IRS. That shift is forthcoming (likely 2027 or later). (taxpayeradvocate.irs.gov)
Why This Matters
- Security: Paper checks are much more susceptible to fraud or loss—statistically over 16× more than electronic payments. (irs.gov)
- Speed & predictability: Direct deposit refunds are issued in under 21 days if filed electronically. Paper checks often take six weeks or more. (irs.gov)
- Cost savings in processing and mailing, and fewer logistical errors or delays.
Takeaway: Ensure your return includes accurate banking information, open or use an account that supports electronic deposits, and check your options if direct deposit isn’t possible. This change is happening now, not later.