In the past, paper checks were a go-to method for receiving tax refunds; however, as digital methods become more common, the federal government is seeking a more modern approach to how refunds are distributed and received.
As of Sep. 30, 2025, in accordance with Executive Order 14247, the Internal Revenue Service is phasing out the use of paper checks to deliver individual taxpayers’ tax refunds. Moving forward, the IRS will issue tax refunds digitally, meaning through direct deposit and other electronic methods.
Why is the IRS phasing out paper checks?
There are a few key reasons why the IRS is phasing out paper tax refund checks, including:
Cost saving. Paper, printing, and mailing can be costly, so reducing this process saves money. According to WhiteHouse.gov, the “digitizing of paper records cost the American taxpayer over $657 million” in 2024.
Accelerated return delivery. Mailing and delivering checks take time. By eliminating the mailing process, electronic refunds will be sent and received much faster.
Better security and fraud prevention. Sending a physical check presents the risk of fraud and/or loss. Checks are frequently lost or stolen in the mail. Plus, there’s a significantly greater risk of fraud, such as having your check altered.
Fewer delivery errors. Sending tax refunds electronically reduces the risk of common mistakes, like damaged checks or outdated addresses.
How long does a direct deposit tax refund take?
One potential benefit of switching to direct deposit, and ultimately phasing out paper tax refund checks, is that the process is much quicker. Individual taxpayers who opt for direct deposit will see their refund in their bank account within 21 days. Be sure to enter all your information correctly to avoid delays.
How will this affect individual taxpayers?
According to IRS.gov, 93% of refunds were issued via direct deposit during the 2025 tax filing season. However, 7% of taxpayers still received their refunds through the mail.
People in this smaller group include, but are not limited to, seniors, unbanked individuals, those who opt out of direct deposit, and individuals without a designated electronic payment method.
In preparation for the phase-out, the IRS will send multiple communications to these groups. These communications will encourage people to switch to direct deposit, which is intended to avoid refund delays of six weeks or more.
How to prepare for the paper check phase out
The six-week delay can be a major disadvantage to the phasing out of paper checks, but there are ways to get ahead of it.
Watch for IRS communications. The IRS will contact taxpayers, encourage them to create or update their IRS online account, provide current banking information, and review personal details that affect refund delivery. This account setup or update will prepare you for your electronic tax refund.
Open a bank account. There are several ways to open a bank or digital account without visiting a physical branch. With some research, you can find the right financial institution that meets your financial needs and goals, where you can avoid unnecessary fees.
Sign up for direct deposit. Both receiving your refund through direct deposit and signing up for direct deposit are quick and easy. All you need to do is enter your account number and routing number for the account you’d like to deposit your return into, and any other requested personal information. Be sure to double-check that your information is correct to avoid any issues or delays with your payment.
Choose an alternative method. According to the IRS, taxpayers without bank accounts have a few alternative methods for receiving their tax refund. Instead, they can choose to receive refunds electronically through options like prepaid debit cards or digital wallets. These options don’t require a checking or savings account, as long as they have an account and a routing number. There may also be limited exceptions made for individuals who can’t use digital payment methods. The IRS should provide more details ahead of the 2026 tax season.
FAQ
The bottom line
The IRS’s decision to shift away from paper checks means tax refunds are now primarily electronic. Taxpayers who don’t switch to direct deposit or other digital payment options risk longer delays under the new system. However, with TaxAct®, you can easily set up direct deposit or opt for a prepaid card when choosing where your tax refund goes.
Whether you have already chosen direct deposit, are switching to direct deposit, or are exploring alternative methods, TaxAct ensures that getting your tax refund is efficient, stress-free, and convenient.
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