The IRS Is Ending Paper Checks for Tax Refunds: What You Need to Know

Kim Elwell
Oct 6
3 min read

The IRS has announced that as of September 30, 2025, paper checks for tax refunds will be phased out “to the extent permitted by law.” Instead, refunds will primarily be delivered electronically via direct deposit or other secure digital methods.

This change affects millions of taxpayers, especially those who have historically relied on mailed checks. The IRS already offered direct deposit for 93% of refunds this past season—more than 87 million refunds.

Let’s walk through what this means, how to prepare, and what to do if you don’t have a bank account.

Why the IRS Is Making This Change

Here are the reasons cited for the IRS ending paper checks for tax refunds:

Speed: Electronic methods are faster than printing and mailing checks.
Cost & Efficiency: Savings on paper, postage, and physical handling.
Security: Fewer chances for checks to be stolen, lost in mail, or delayed.

It’s part of a broader push by the federal government: an executive order earlier this year mandates that all federal payments move to electronic channels where allowed by law.

What Changes for Taxpayers

1. You’ll Need a Valid Direct Deposit Account

If you haven’t already, you’ll need to provide bank account and routing numbers. This will become the default method for refunds.

2. Alternatives for Unbanked Taxpayers

Not everyone has a traditional bank account. The IRS plans to offer alternatives like prepaid debit cards, digital wallets, or limited exceptions where paper checks are still allowed.

3. Paper Checks Don’t Disappear Overnight

The IRS is “phasing out” paper checks. That means some limited exceptions may remain, but those will be constrained by law.

How to Prepare to Ensure You Get Your Refund Smoothly

Check or set up direct deposit: Provide routing and account numbers in your next tax return.
Verify your bank info: Mistyped routing/account numbers are a common source of delays.
Consider alternatives: If you don’t use a traditional bank, explore prepaid card or digital wallet options.
Stay informed: The IRS will release additional guidance before the 2026 tax filing season.

What’s Changing Behind the Scenes

No more mailing costs or delays tied to physical checks.
Reduced paperwork burden on IRS and taxpayers alike.
Fewer lost checks or fraud risks associated with mail theft.

But for those unfamiliar with digital payments or those without bank accounts, this change could feel disruptive.

Why This Matters for Small Business Owners

Even if you’re not getting a refund yourself, here’s what this shift signals:

The government is pushing harder toward digital financial infrastructure.
If your business handles any refunds, reimbursements, or tax filings, expect more electronic mandates in the future.
Mistakes with bank account info or payment routing could lead to delays—if your client is waiting on a refund, that’s stress on your side too.

How BAS Can Help You Smooth the Transition

If all this sounds like a headache, that’s by design—it’s a big change. But you don’t have to tackle it alone. BAS can help you:

Ensure your tax returns are filed with correct, up-to-date bank information.
Advise on alternative payout methods (digital wallets, prepaid cards) when needed.
Monitor new IRS guidelines and adjust your processes accordingly.

With 54+ years of experience, we’re already helping clients stay ahead of changes like this so nothing gets missed.

Final Takeaway

The era of paper refund checks is ending. If you haven’t already, you’ll want to update your direct deposit information (or arrange an alternative). As the IRS phases this change in, preparation is your best line of defense.

And if dealing with tax filing feels overwhelming, BAS is here to help you navigate it—bank info, electronic refund setup, and more.

👉 Or give us a call (856) 853-5422 x117 and make sure your refund arrives without a hitch. This information is sourced and cited at https://money.com/irs-ends-paper-checks/