Millions of taxpayers expecting paper refund checks from the IRS after Sept. 30, 2025, will instead receive a notice telling them to provide direct-deposit details or wait. The agency confirmed it will phase out paper tax refund checks for individual filers starting on that date, acting on a White House directive to move all federal payments to electronic channels. For anyone who files a return without bank account information on record, the practical result is a frozen refund until they respond.
Why the Sept. 30, 2025 paper-check cutoff changes refund timing
The shift traces directly to a recent executive order that directed federal agencies to modernize away from paper-based payments and collections. The order’s stated goals are reducing costs, processing delays, and the fraud, loss, and theft risks that come with mailing checks. In response, the U.S. Department of the Treasury reiterated the same Sept. 30, 2025 deadline in a payment modernization announcement, confirming that federal payments previously issued by paper check, including tax refunds, will be converted to electronic delivery.
The IRS explained the phase-out for individual taxpayers first, making refund recipients the initial group affected. When a filer’s return lacks valid banking details, or when the information on file is incorrect, the agency now issues a CP53E notice. That letter gives the taxpayer a 30-day window to supply accurate bank routing and account numbers through the IRS Individual Online Account portal. IRS employees cannot update banking information over the phone or at walk-in offices, which means the online portal is the only self-service path to release a held refund.
CP53E notices, frozen refunds, and the 2026 filing season
The Taxpayer Advocate Service, an independent office within the IRS, warned that beginning in 2026 the agency may temporarily freeze a refund until the taxpayer provides direct-deposit information or formally requests a paper check. That distinction matters: a filer who sets up direct deposit before submitting a return should receive a refund on the normal processing timeline, while someone who triggers a CP53E notice faces at least a 30-day hold plus whatever additional time the IRS needs to verify the newly submitted banking data.
The Taxpayer Advocate Service also published guidance authenticating the CP53E notice itself, noting that the IRS will never request bank information by text, email, or phone call. Taxpayers who receive such requests through those channels should treat them as potential scams. The legitimate response channel is the IRS online account system, where filers can log in, verify their identity, and enter or correct their banking details.
How taxpayers can avoid delays
For most filers, the fastest way to steer clear of a refund freeze is to provide accurate account details when they file. Tax software and many professional preparers already prompt users to enter routing and account numbers; starting with 2025 returns filed in early 2026, overlooking those fields will carry a higher risk of delay. Taxpayers who expect a refund and do not currently use a bank or credit union may need to open an account or consider other qualifying options, such as certain prepaid debit cards that accept direct deposit.
Keeping information current is just as important as entering it once. If a taxpayer closes a bank account after filing, or if the bank rejects the deposit for any reason, the IRS will not simply mail a replacement check by default. Instead, the refund will move into a held status and trigger a CP53E notice, restarting the 30-day clock and pushing the payment date further out.
Exceptions and paper-check requests
The IRS and Treasury have both signaled that some limited exceptions will remain for people who cannot use electronic payments, including certain hardship situations and cases where banking access is severely constrained. However, those exceptions are expected to be narrow and may require additional documentation or a formal request for a paper check. Even when a paper check is ultimately approved, taxpayers should expect longer processing times than in prior years, because paper issuance will no longer be the default workflow.
Taxpayers who prefer paper for recordkeeping should note that the change affects only how money is delivered, not how returns are filed. Individuals can still submit paper tax returns by mail if they choose, but any refund tied to those returns will be routed through the same electronic-first system once processing is complete.
What to do now
With the Sept. 30, 2025 cutoff approaching, taxpayers can prepare by confirming that they have a checking or savings account capable of receiving federal deposits, gathering the correct routing and account numbers, and creating or updating their IRS online account. Doing this well before filing season reduces the risk of last-minute problems and makes it easier to respond quickly if a CP53E notice does arrive.
For anyone counting on a refund to cover bills or other time-sensitive expenses, the key takeaway is that direct deposit will soon be more than just the fastest option-it will be the default expectation. Failing to provide electronic payment details will not forfeit the refund, but it will likely mean waiting weeks longer to receive money that used to arrive by check in the mail.
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