Paper tax refund checks on the way out as IRS shifts to electronic payments

The IRS will begin phasing out the use of paper checks for refunds to individual taxpayers at the end of September and will publish detailed guidance for 2025 tax returns before the 2026 filing season begins, a Tuesday news release said.

The move away from paper checks is aligned with President Donald Trump’s Executive Order 14247, Modernizing Payments to and From America’s Bank Account, which orders that Treasury move to electronic disbursements, including for tax refunds, with some exceptions, to the extent that the law allows.

The change affects a small percentage of individual taxpayers, according to data for the 2025 filing season. More than 93.5 million taxpayers received refunds, and almost 87 million (93%) received their refunds via direct deposit. The remaining 7% received paper checks.

Phasing out paper checks will protect taxpayers because that form of payment is 16 times more likely to be lost, stolen, altered, or delayed than an electronic payment, the IRS said. Electronic payments also are deposited more quickly than checks and are less expensive, the IRS said.

For those who do not have access to bank accounts, the IRS will offer options such as prepaid debit cards or digital wallets. In addition, some exceptions will be made, the IRS said. The executive order lists several reasons for exceptions, including a lack of access to banking services or electronic payment systems and for emergency payments where electronic disbursement would cause undue hardship.

The executive order also applies to payments made to the IRS, which said it will issue guidance on that part later.

Until further notice, taxpayers should use existing forms and procedures, including those filing their 2024 returns on extension of a due date prior to Dec. 31, 2025, the IRS said.

AICPA advocacy

In a letter to Treasury officials in June, the AICPA said Treasury should extend the time frame for mandating the end of paper checks for federal disbursements or at least set rules that make the transition easier for taxpayers.

— To comment on this article or to suggest an idea for another article, contact Martha Waggoner at Martha.Waggoner@aicpa-cima.com.