On September 30, 2025, the IRS will begin phasing out paper tax refund checks, marking a major shift in how taxpayers receive their money back at tax time. While earlier reports suggested that all paper checks for payments and refunds would disappear immediately, the most recent guidance clarifies a few important points. Here’s what you need to know.
What’s Changing
- Refunds First: The phase-out applies to paper tax refund checks for individual taxpayers. The IRS and Treasury are encouraging everyone to switch to electronic delivery, such as direct deposit.
- Not Overnight: This is a transition, not a one-day cutoff. Exceptions will still exist for taxpayers who cannot access electronic banking.
- Future of Payments: The executive order driving this change directs federal agencies to eliminate paper checks “to the extent permitted by law.” That means tax payments made to the IRS by paper check will also eventually move online, though the timeline is more gradual.
Why the Shift?
- Faster refunds: Direct deposits are processed more quickly than checks.
- Greater security: Electronic payments reduce the risk of lost or stolen checks.
- Cost savings: Going digital reduces government processing and mailing expenses.
- Convenience: For most taxpayers, it simplifies the filing and refund process.
What You Should Do Now
- Set up direct deposit if you haven’t already. You’ll need your bank account and routing number when you file.
- Keep your information updated to avoid refund delays.
- Plan ahead: If you don’t have a bank account, explore alternatives such as prepaid debit cards or digital wallets, which may be offered as options in the future.
The IRS will release more detailed guidance before the 2026 filing season. While the long-term goal is to make all federal payments electronic, paper checks won’t disappear overnight. The important takeaway: prepare now so your next refund is delivered smoothly. Questions about how this transition affects you? Our team is here to help you navigate the change with confidence.
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