The average federal tax refund last filing season topped $3,100. Starting with tax year 2026 returns, filed during the 2027 season, anyone who doesn’t have direct deposit information on file with the IRS could wait an extra six weeks or more to get that money. The reason: the IRS is phasing out paper refund checks, and the transition comes with a built-in delay that millions of filers may not see coming.
Under the new process, filers without banking details on record won’t simply receive a check in the mail the way they always have. Instead, the IRS will send a notice asking them to provide electronic payment information. If they don’t respond within about 30 days, the agency will eventually mail a paper check, but only after an additional six-week waiting period. A refund that once arrived in roughly three weeks could take more than two months.
Why the IRS is eliminating paper checks
The change traces back to Executive Order 14247, which directs the Treasury Department to stop issuing paper checks for most federal disbursements by Sept. 30, 2025. Tax refunds are among the largest categories of federal payments affected.
The IRS says the shift is primarily about security. According to IRS news release IR-2025-94, paper checks are more than 16 times as likely to be lost, stolen, altered, or delayed compared to electronic transfers. That figure is an IRS talking point; the agency has not published the underlying methodology, and it has not been independently verified. The IRS also frames the move as a cost-saving measure and a step toward faster delivery.
Electronic alternatives include direct deposit to a bank account, payments to prepaid debit cards, and transfers to digital wallets, according to the IRS phaseout explainer.
How the delay plays out, step by step
For anyone who files a tax year 2026 return without direct deposit details stored with the IRS, the refund process now has several new stages:
- The return is processed as usual. Nothing changes on the front end. The IRS reviews the return and calculates the refund.
- A CP53E notice goes out instead of a check. Rather than cutting a paper check, the IRS mails a notice called a CP53E, asking the filer to submit banking information for electronic delivery.
- The filer has roughly 30 days to respond. During that window, the filer can provide a bank account number, prepaid card, or digital wallet. This timeline comes from the Taxpayer Advocate Service, though TAS has not yet published a detailed public document outlining the full CP53E process.
- No response triggers a six-week paper check fallback. If the filer doesn’t respond within that window, the IRS will eventually issue a paper check, but not until approximately six weeks after the notice period ends.
Stack those steps together and a filer who ignores or misses the CP53E notice could wait 10 weeks or more beyond normal processing before a check shows up in the mailbox.
Who stands to lose the most time
About 80% of individual filers already receive their refunds by direct deposit, which means roughly one in five do not. According to the IRS Data Book for fiscal year 2023, approximately 40 million refunds per filing season were issued as paper checks, giving some sense of the scale of disruption this policy could cause.
The filers most likely to be caught in the new delay fall into a few overlapping groups:
- Unbanked households. According to the FDIC’s 2023 national survey (the most recent available), about 4.5% of U.S. households have no checking or savings account at all.
- Filers who have accounts but never shared them with the IRS. Millions of taxpayers have always received paper checks or used tax preparation services that handle refund delivery through their own channels, such as refund transfer products.
- Older adults and rural communities. Taxpayers with limited internet access or less comfort with digital tools face steeper barriers to setting up electronic payments.
- Low-income households relying on refund money quickly. For families counting on the Earned Income Tax Credit or Child Tax Credit, a 10-week delay can mean missed rent or utility payments.
The executive order references exceptions and accommodations for people who cannot use electronic methods, but as of June 2026, the IRS and Treasury have not published detailed guidance on who qualifies or how to request one.
How to avoid the delay before filing season
The most direct fix is making sure the IRS has your direct deposit information before you file your tax year 2026 return. Several paths get you there:
- Enter it on your return. When you file, you can include your bank routing and account numbers directly on Form 1040. Filers who want to split a refund across multiple accounts can attach Form 8888.
- Update your IRS Online Account now. The IRS lets taxpayers manage banking details through their online account portal. Setting this up well before filing season avoids a last-minute scramble.
- Respond to the CP53E notice quickly if you get one. Providing valid banking information within the 30-day window will get your refund delivered electronically without the six-week penalty.
- Check with your tax software or preparer. Major tax preparation platforms like TurboTax, H&R Block, and TaxAct typically prompt filers for direct deposit details during the filing process. Confirm that your banking information is going directly to the IRS and not being routed through a third-party refund transfer product that may not satisfy the new requirement.
For filers who are unbanked, prepaid debit cards that accept direct deposits are one option. Several banks and credit unions also offer low-cost or no-fee accounts specifically designed for people receiving government payments.
What the IRS still hasn’t clarified
Several significant gaps remain in the agency’s public guidance as of June 2026:
- Exception criteria. Who qualifies for a paper check exception, and what documentation is required? No detailed rules have been published.
- Call center capacity. The CP53E notice process will generate millions of additional contacts with the IRS. The agency has not addressed whether it has the staffing or phone infrastructure to handle the volume, a concern given its well-documented history of long hold times during filing season.
- Error handling. If a filer provides incorrect banking information in response to a CP53E notice, it is unclear how quickly the IRS can reroute the payment or whether the six-week clock resets.
- State refund confusion. The federal phaseout does not directly affect state tax refund processes, but filers may not realize the two are separate. No coordinated federal-state guidance has been issued.
The IRS modernization hub is the best place to watch for updates as the agency fills in these details ahead of the 2027 filing season. The clearest action anyone can take right now: get your banking information on file with the IRS before you file your next return, or be prepared to wait weeks longer than you’re used to for your money.
