The Internal Revenue Service and the U.S. Department of the Treasury announced in release IR-2025-94 that paper tax refund checks for individual filers began phasing out on September 30, 2025, under Executive Order 14247. The change targets a documented safety gap rather than a hypothetical one: paper refund checks travel through the mail, and the IRS’s own numbers show how often that trip goes wrong compared with an electronic deposit. Most individual filers will notice nothing at all, because direct deposit was already the default before the mandate existed. What remains is a shrinking minority still waiting on an envelope, and that is the group the phase-out is built to move.
A March Order Set a September 30 Deadline for Paper Checks
Executive Order 14247, “Modernizing Payments To and From America’s Bank Account,” was signed in March 2025 and directed federal agencies to shift disbursements toward electronic payment methods wherever the law allows it. The IRS says that, to the extent permitted by law, it generally stopped issuing paper refund checks for individual taxpayers after September 30, 2025, making that date the first hard cutoff tied to the broader order. Full guidance covering 2025 tax returns is due before the 2026 filing season opens, and until it arrives, the agency says filers should keep using the forms and procedures already in place, including anyone finishing a 2024 return on an extension due before December 31, 2025.
The mandate reaches well beyond tax refunds. The Treasury Department, announcing a public request for information the same year, said the September 30 cutoff also applies to Social Security benefits and federal vendor payments, and it described paper checks as “increasingly the front door for fraud” as it sought comment on how to help unbanked and underbanked households make the switch. That framing lines up with the IRS’s own justification for the refund change, since both agencies point to the same reliability gap between a check that travels through the mail and one that moves electronically.
The order carves out exceptions rather than eliminating paper checks outright. The government will still issue a limited number of checks in cases where no electronic alternative is available, and the IRS has made no changes yet to how refunds reach the accounts of deceased taxpayers, saying it will publish separate guidance if that changes. Those carve-outs keep the mailed check alive for edge cases even as it disappears as the default path for the millions of filers who already bank electronically.
Forcing the switch is not expected to slow refunds down in the meantime. The IRS says one of the executive order’s own goals is to reduce delays and ensure timely, accurate payments, and that in most cases the transition itself will not hold up a refund, since electronic delivery already reaches taxpayers faster and more securely than a check moving through the mail. The agency frames the shift as removing a point of failure rather than adding a new one.
Inside the kit: A notice decoder, the refund-trace steps for Form 3911, a refund status tracker spreadsheet and the 3-year refund deadline. Open The IRS Refund Recovery Kit.
The Sixteen-Times Gap Behind the Direct-Deposit Push
The number driving the policy is specific. The IRS says paper refund checks are over 16 times more likely to be lost, stolen, altered, or delayed than an electronic payment, and the agency cites that gap as its central reason for pushing filers toward direct deposit rather than simply warning them to watch their mailboxes more closely. Speed tracks the same divide. Electronic refunds generally arrive in under 21 days when a return is filed electronically with no issues on the account, while a refund mailed as a paper check can take six weeks or longer to reach the taxpayer who is owed it.
Those figures explain why the phase-out is aimed at a minority rather than the whole filing population. During the 2025 filing season the IRS issued more than 93.5 million individual refunds, and 93 percent of them, almost 87 million, already arrived by direct deposit before the phase-out took effect. Only 7 percent of individual refund recipients were paid by a check mailed to their address, which is the specific slice the September 30 cutoff is designed to shrink further, since a check sitting in a mailbox for days is exactly the failure point the sixteen-times figure describes.
What Happens When a Refund Has No Bank Account to Land In
The IRS says direct deposit will stay the primary way refunds go out, but it is not the only one. For filers without a bank account, the agency points to alternative electronic methods, including certain mobile-app payments and prepaid debit cards, alongside account-opening help at FDIC: GetBanked and MyCreditUnion.gov, and it says limited exceptions to the electronic requirement will still be made for hardship and legal or procedural situations.
For a return that omits direct deposit information entirely, the IRS built a specific fallback rather than an automatic paper check. Its updated fact sheet, FS-2026-02, says the agency will mail a letter to the address on file asking for banking information, followed by a CP53E notice that gives the taxpayer 30 days to respond with an account number or an explanation for why one cannot be provided.
The response window determines what happens next. If a filer answers within the 30 days, the fact sheet says the refund is released immediately, either by direct deposit or by check. If there is no response and the return has no other issues, the refund still goes out, but only as a paper check, after a six-week wait that is the same delay the phase-out was built to make rare. The IRS is explicit that it will never call or text a taxpayer to request banking details for this process, and that its employees cannot take account numbers over the phone even from a taxpayer who calls in first, so any such call or text claiming otherwise is not coming from the agency.
When a Refund Does Not Arrive
Everything above describes the rule and the fallback the IRS built for it, but a refund can still go missing in the gap between filing and either deposit or notice. Nothing in the agency’s own release names the trace form a filer submits when a check never shows up, and nothing prints the deadline that caps how long a missing refund can still be claimed once it is spotted.
The IRS Refund Recovery Kit is a 13-page kit built to cover that gap, including the 3-year refund deadline that governs how long a delayed or missing refund can still be pursued.
See the refund-trace steps in The IRS Refund Recovery Kit.
This article was researched and drafted with the assistance of AI and reviewed by The Money Overview editorial team.
