Millions of individual taxpayers who still receive paper refund checks from the IRS face a hard deadline. Beginning September 30, 2025, the agency will stop mailing those checks to the extent permitted by law, following a directive tied to Executive Order 14247. Filers who have not set up direct deposit by then risk significant delays in receiving their money during the 2026 filing season and beyond.
Why the September 30 deadline changes tax refund delivery
The IRS has stated plainly on its refunds guidance: “We’re phasing out paper check payments of tax refunds.” That single sentence carries real consequences for anyone who has relied on a mailed check to collect an annual refund. After the cutoff, filers without electronic deposit information on their returns will not receive a check in the mail the way they have for decades. The shift is not optional for the agency. It follows a presidential order titled “Modernizing Payments To and From America’s Bank Account,” which directs the Treasury Department to end most paper-based federal payments. The White House cited cost, delivery delays, and the risk of fraud and theft as the driving reasons behind the order.
For filers, the practical step is straightforward: enter a bank routing number and account number directly on the tax return. The IRS also allows refunds to be split across multiple accounts, which gives taxpayers the ability to direct portions of a refund into savings, checking, or retirement accounts in a single filing. That flexibility could reduce the need for filers to later request changes or file amended returns simply to redirect funds they already received in one lump sum. Whether split deposits actually lower amended-return rates after 2025 is an open question, but the mechanism itself removes a common friction point.
Treasury’s fraud and cost rationale for ending paper checks
The decision did not originate with the IRS alone. The Bureau of the Fiscal Service, the arm of the Treasury Department responsible for federal payments, confirmed through an IRS announcement that paper refund checks will end on September 30, 2025, with specified exceptions. The government-wide push applies to all federal disbursements, not just tax refunds, though individual taxpayer refunds are among the first categories affected.
Paper checks are slower to deliver, easier to steal from mailboxes, and more expensive to print and mail than electronic transfers. The executive order frames the shift as a modernization effort, but it also reflects a long-running federal preference for electronic payments that has already reshaped how benefits and contractor payments are made. Tax refunds had remained a notable holdout, in part because they involve such a broad cross-section of the public. The September 30 date now closes that gap for individual filers and aligns refunds with the broader federal payments strategy.
Fraud prevention is central to the rationale. Checks can be intercepted, altered, or cashed by someone other than the intended recipient, and resolving those cases requires time-consuming investigations and reissuance. Direct deposit, by contrast, routes funds through established banking channels, with electronic records that make it easier to verify where money went and whether it was received. Treasury officials have also pointed to the administrative savings from not printing and mailing millions of pieces of paper each year, a cost that ultimately falls on taxpayers.
Gaps in the plan for filers without bank accounts
The IRS and Treasury have not published data showing exactly how many individual taxpayers currently lack a bank account or direct-deposit access. Without that number, it is difficult to assess how many people could be stranded by the new policy. The agencies have indicated that certain legal exceptions will remain in place, such as cases where statutes still require paper instruments or where electronic delivery is not feasible, but they have not yet detailed how those exceptions will work in practice for ordinary filers.
Unbanked and underbanked households are the most obvious pressure point. People who have historically relied on refund checks may now need to open basic checking or savings accounts, or explore low-cost prepaid cards that can accept direct deposits. Community banks, credit unions, and nonprofit financial counselors are likely to play a larger role in helping taxpayers make that transition, particularly in rural areas and neighborhoods where traditional banking options are limited.
Advocates for low-income filers have raised concerns that the shift, while efficient on paper, could widen existing gaps in access to refunds. Many taxpayers use their refunds as a critical part of their annual budget, covering rent, utilities, or debt payments. Any delay caused by missing or incorrect bank information could have immediate consequences. The IRS has emphasized that taxpayers remain responsible for ensuring their routing and account numbers are accurate, and errors can result in refunds being sent to the wrong institution or rejected and reprocessed.
Between now and the September 30, 2025 deadline, outreach will be crucial. Tax preparers, volunteer assistance programs, and employers that distribute tax information can help by reminding filers to add direct deposit details, explaining how split refunds work, and clarifying that paper checks will no longer be the default option. For those who cannot or do not wish to open a bank account, it will be important to watch for further guidance from the IRS and Treasury on any alternative arrangements allowed under the law.
The policy goal is clear: faster, cheaper, and more secure refunds. Whether that goal can be met without leaving vulnerable taxpayers behind will depend on how effectively the transition is explained and how accessible electronic payment options become before the last paper checks go out.
Free tool for readers: You check your blood pressure — when did you last check your retirement? You can get your free Retirement Safety Score in about five minutes, with no sign-up to see it.
