The federal government is phasing out paper checks.

President Donald Trump issued an executive order last March requiring all federal agencies to transition from paper checks to electronic funds transfer to the extent permitted by law.

All payments made to the federal government (taxes, fees, fines) will also eventually have to be made electronically, but this transition will only be made “as soon as practicable.”¹

The process has already started-the IRS began phasing out paper refund checks for individual taxpayers on September 30, 2025.² No changes are being made to the process of filing a tax return. Taxpayers will continue to file as usual.

How Refunds Will Be Paid

From now on, most IRS refunds will be paid by direct deposit to taxpayers’ bank accounts. Taxpayers who don’t have access to bank accounts can be paid by other digital methods, such as prepaid debit cards, digital wallets, or mobile payment apps. Paper checks will continue to be issued in limited cases.³

Why the Change?

Paper checks are over 16 times more likely to be lost, stolen, altered, or delayed than electronic payments.

For most taxpayers, this is not a big deal. Most individual taxpayers already receive their refunds by direct deposit into their bank accounts. During 2025, 93 percent of all refunds were paid by direct deposit. Only 7 percent of refunds were paid by paper checks.⁴

Exceptions

The IRS will continue to issue paper refund checks for⁵

• individuals who request a waiver because they do not have access to banking services or electronic payment systems,
• certain emergency payments where electronic disbursement would cause undue hardship,
• national security- or law enforcement-related activities where non-EFT transactions are necessary or desirable, and
• other circumstances as determined by the Secretary of the Treasury.

IRS officials have stated that the agency will establish a dedicated phone extension for taxpayers to call the IRS and request a waiver. Taxpayers will also be able to log in to their individual online accounts on the IRS website and indicate why they cannot provide banking information.

What You Should Do Now

If you haven’t done so already, arrange with your paid tax preparer-or prepare on your own-to have any tax refunds sent by direct deposit into an account in your name at a bank or another financial institution, such as a credit union, brokerage firm, or mutual fund. Direct deposit remains the safest and fastest way to receive a refund.

For direct deposit, you may use a checking or savings account, an IRA (traditional, Roth, or SEP), a health savings account (or HSA), or a Coverdell education savings account.

Taxpayers may also split a refund among up to three accounts. Most e-file and tax preparation software support this feature. If you file a paper return, however, you must attach Form 8888, Allocation of Refund, to divide your refund among multiple accounts.⁶

To receive your refund by direct deposit, simply provide valid routing and account numbers when filing your return. IRS officials have indicated that the agency plans to send letters to paper filers who do not provide banking information on their 2025 returns.

Taxpayers filing electronically will see a message indicating that their return has been accepted and will be processed, but that they must supply banking information. These taxpayers will be able to add their direct deposit information through their IRS individual online account.

According to IRS officials, if a taxpayer does not respond to the agency’s request for banking information for their 2025 return, the IRS will still issue the refund-but only after a six-week delay.⁷

Taxpayers who don’t have a bank account can visit the FDIC website or use the National Credit Union Administration’s Credit Union Locator tool to find an institution that allows them to open an account online. Veterans can use the Veterans Benefits Banking Program to open a checking or savings account and enroll in direct deposit at participating institutions.

Refunds may also be deposited into certain mobile apps or prepaid debit cards, provided they offer routing and account numbers. Taxpayers should confirm with the app provider or financial institution which numbers to use. The IRS has indicated that it plans to expand these payment options in the future.

Payments to the IRS

Eventually, the IRS will require all tax payments to be made electronically. However, until further notice, the IRS will continue to accept checks. Additional guidance and information for filing 2025 taxes will be issued before the 2026 filing season.

To avoid processing delays, it is always wise to pay the IRS electronically rather than by paper check. There are multiple electronic payment options. ⁸

Takeaways

Paper refund checks are already the exception, not the rule.

To ensure fast, secure refund payments-and avoid processing delays-provide the IRS with valid banking information or arrange direct deposit through your tax preparer.

If you don’t have a bank account, the IRS and federal agencies provide multiple options to help you either open one or receive funds through approved digital methods.