The Internal Revenue Service (IRS) has confirmed it will begin phasing out paper tax refund checks, with a full transition to electronic payments starting on September 30, 2025. The agency stated the move is designed to increase security, speed up the delivery of refunds, and reduce operational costs for the federal government.
Key Takeaways
- End of Paper Checks: The IRS will transition away from issuing paper tax refund checks beginning September 30, 2025.
- Faster Refunds: Electronic payments typically arrive in less than 21 days, compared to six weeks or more for mailed checks.
- Increased Security: Paper checks are 16 times more likely to be lost, stolen, or delayed than electronic payments.
- Options for Unbanked: The IRS will offer alternatives like prepaid debit cards and digital wallets for individuals without bank accounts.
- Filing Unchanged: The process for filing tax returns will not change for taxpayers.
The Shift to Mandatory Electronic Refunds
The Internal Revenue Service is preparing for a significant change in how it distributes tax refunds. Starting September 30, 2025, the agency will begin to eliminate paper checks in favor of electronic payment methods. This decision aligns with a March executive order issued by former President Donald Trump aimed at modernizing federal government processes.
According to the IRS, this transition will protect taxpayers from fraud and delivery issues while also streamlining the refund process. The agency plans to release detailed guidance for the 2025 tax returns before the 2026 filing season officially opens.
For now, taxpayers should continue to use all existing forms and procedures. This includes those who are filing their 2024 tax returns on an extension, which must be submitted before December 31, 2025. The core tax filing experience will remain familiar, with the primary change being the method of receiving a refund.
Overwhelming Majority Already Use Direct Deposit
The move away from paper checks will affect a relatively small portion of taxpayers. The IRS has noted that most individuals already opt for the convenience and speed of direct deposit. During the 2025 tax filing season, the agency issued over 93.5 million refunds to individual filers. Of those, nearly 87 million, or 93%, were sent via direct deposit, leaving only 7% of recipients to receive a paper check.
Why the IRS is Ending Paper Checks
The primary motivations behind this policy shift are security, speed, and cost-efficiency. The agency has highlighted significant risks associated with physical checks that are largely eliminated with digital transfers.
Enhanced Security for Taxpayers
One of the most compelling reasons for the change is the vulnerability of mailed checks. According to agency data, paper checks are significantly more prone to issues during transit.
The IRS reports that paper checks are 16 times more likely to be lost, stolen, altered, or delayed compared to electronic payments. This vulnerability can lead to lengthy resolution processes for taxpayers waiting for their money.
By moving to electronic systems, the IRS aims to create a more secure and reliable refund process. Digital payments provide a clear trail and reduce the opportunities for mail theft and check fraud, offering greater peace of mind for millions of Americans.
Faster Access to Refund Money
The speed of delivery is another major benefit of the transition. Taxpayers who file electronically and choose direct deposit often receive their refunds in less than 21 days. In contrast, waiting for a paper check can be a much longer process.
Receiving a refund by mail can take six weeks or more from the time the return is processed. This delay can cause financial strain for individuals and families who rely on their tax refund for essential expenses. The switch to electronic payments ensures that taxpayers can access their funds much more quickly.
Cost Savings for the Government
The IRS also pointed to the financial benefits of going paperless. Printing and mailing millions of checks each year represents a substantial cost to the federal government. These expenses include paper, ink, printing equipment maintenance, postage, and labor.
Eliminating these costs will result in savings that can be reallocated to other essential services. This move is part of a broader government effort to digitize operations and reduce administrative overhead.
What Taxpayers Need to Do
While the method of receiving a refund is changing, the IRS has emphasized that the process of filing taxes will not. Taxpayers will continue to file their returns as they normally would, whether through tax software, a tax professional, or by mail.
The most important step for individuals is to ensure their banking information on file with the IRS is current and accurate. An incorrect account or routing number can lead to significant delays in receiving a direct deposit. Taxpayers are encouraged to double-check this information when they file their returns.
“Most individual taxpayers already receive their refunds by direct deposit into their bank accounts. During the 2025 tax filing season, the IRS issued more than 93.5 million tax refunds to individual income tax filers, and 93% of those, almost 87 million refunds, were issued through direct deposit. Only 7% of individual refund recipients received their refunds by check through the mail,” the IRS stated.
Solutions for the Unbanked Population
The IRS recognizes that not all taxpayers have access to a traditional bank account. To ensure the new policy is inclusive, the agency will provide several secure alternatives for receiving electronic refunds.
These options are designed to provide a safe and convenient way for everyone to receive their money without needing a personal bank account. The available methods will include:
- Prepaid Debit Cards: Funds can be loaded directly onto a prepaid card, which can then be used for purchases or cash withdrawals.
- Digital Wallets: Refunds may be sent to popular digital wallet services, allowing for easy online spending or transfers.
- Limited Exceptions: The IRS has indicated that there will be a process for limited exceptions to the paperless rule, although specific details have not yet been released.
This approach ensures that the transition to a fully digital refund system does not leave vulnerable populations behind. The agency is committed to providing accessible options for all taxpayers, regardless of their banking status. More information on these alternatives is expected as the September 2025 transition date approaches.
