The IRS is making one of its most significant operational changes in decades: the gradual elimination of paper refund checks. As part of a federal initiative to modernize government payment systems, the IRS has begun shifting all refund disbursements to electronic methods, effective September 30, 2025.

This transition aims to improve security, increase efficiency, and significantly reduce processing delays. Here is a clear breakdown of what this change means for individual taxpayers and the steps you should take to prepare.

Why the IRS Is Moving Away From Paper Checks

The move to electronic payments is driven by several compelling factors:

1. Enhanced Security

Paper checks are substantially more vulnerable to loss, theft, alteration, and mail delays. According to IRS data, they are more than 16 times as likely to encounter delivery issues compared to electronic payments.
Direct deposit eliminates these risks and ensures a more reliable delivery process.

2. Faster Processing

Electronic refunds remain the fastest way to receive tax refunds:

• Direct deposit: typically within 21 days

• Paper check: may take six weeks or longer

For millions of taxpayers, this shift reduces waiting times and improves the overall refund experience.

3. Operational Efficiency

Electronic transactions are more cost-effective for the IRS to process. With 93% of taxpayers already using direct deposit in 2025, this change aligns with current taxpayer behavior and reduces administrative expense and fraud risk.

How Refunds Will Be Issued Going Forward

Most taxpayers will now receive refunds through one of the following methods:

• Direct deposit to a bank account

• Deposit to prepaid debit cards

• Digital wallets or mobile payment applications that support routing and account numbers

• Other approved electronic payment methods

Paper checks will continue only in limited circumstances where electronic payments are not feasible.

Who May Still Qualify for a Paper Refund Check?

The IRS will issue paper checks only for taxpayers who fall into specific exception categories, including:

• Individuals who request and qualify for a waiver due to lack of access to banking or digital payment systems

• Certain emergency or hardship situations

• Payments connected to national security or law-enforcement matters

• Other limited cases deemed appropriate by the Secretary of the Treasury

To support this, the IRS plans to introduce:

• A dedicated phone line for waiver requests

• An option within each taxpayer’s IRS online account to explain the inability to provide banking information

How Taxpayers Should Prepare

To avoid delays or interruptions, taxpayers should take the following steps:

1. Provide Valid Banking Information

When filing your return, ensure you include:

• Routing number

• Account number

• Type of account (checking, savings, IRA, HSA, Coverdell ESA)

Electronic filers who omit this information will receive a notice prompting them to update it online. Paper filers may receive a mailed request from the IRS.

2. Understand Refund Allocation Options

Taxpayers may split a refund into up to three accounts using IRS Form 8888. This option is useful for allocating funds across savings, retirement accounts, or investment accounts.

3. Be Aware of Delays for Missing Information

If a taxpayer does not respond to the IRS request for banking details, the IRS will still issue the refund—but only after a six-week processing delay.

4. Open an Account if You Don’t Already Have One

Individuals without bank accounts can explore several federally supported options, including:

• The FDIC GetBanked program

• The National Credit Union Administration (NCUA) locator for credit unions

• The Veterans Benefits Banking Program for eligible veterans

Refunds may also be deposited into certain prepaid cards or qualifying mobile payment applications.

What This Means for Future Payments to the IRS

While refunds are the first step, the IRS has confirmed that it will eventually require all tax payments to be made electronically.
For now, paper checks are still accepted, but electronic payment methods remain the recommended option to prevent processing delays.

Key Takeaways

• The IRS has started phasing out paper refund checks as of September 30, 2025.

• Direct deposit and other electronic methods are now the standard for refund payments.

• Taxpayers must ensure they provide accurate banking information to avoid delays.

• Exceptions for paper checks will be limited and require a waiver or special circumstances.

• Preparing now will ensure faster, more secure refund processing for the 2025 filing season.