The IRS has announced that it will begin phasing out paper refund checks for individual taxpayers starting at the end of September 2025. Full guidance for the 2025 tax year will be released ahead of the 2026 filing season.
This change supports the federal government’s broader initiative to modernize the way payments are issued and received. According to IRS statistics, the vast majority of taxpayers already receive their refunds electronically. During the 2025 filing season, more than 93.5 million taxpayers received refunds, and nearly 93% of them opted for direct deposit. Only about 7% still received a paper check.
Why the Change?
Electronic payments are considered safer, faster, and less expensive than paper checks. In fact, the IRS notes that checks are 16 times more likely to be lost, stolen, altered, or delayed. Direct deposits and other electronic methods not only reduce risk but also put money in taxpayers’ hands more quickly.
What If You Don’t Have a Bank Account?
For individuals who don’t have access to traditional banking services, the IRS plans to offer alternatives such as prepaid debit cards or digital wallet options. There will also be exceptions in certain cases, including hardship situations where an electronic payment would not be feasible.
What’s Next?
Until the new guidance is issued, taxpayers should continue following existing procedures for filing and receiving refunds. The IRS also intends to release additional rules for how the shift will apply to payments made to the IRS, not just refunds sent from the IRS.
Key Takeaway for Taxpayers
If you’re still receiving a paper refund check, now is the time to consider setting up direct deposit or another electronic option. Doing so will not only help you stay aligned with the upcoming rules but also ensure faster and more secure access to your refund.