Starting in 2025, the IRS will no longer issue paper checks for tax refunds, signaling a significant transformation in the way Americans receive their tax returns. This decision is part of a broader initiative to modernize federal financial operations, emphasizing digital payment methods.
As highlighted by various sources, including Futbolete, this shift aims to streamline processes and reduce inefficiencies. Individuals who are used to receiving a paper check will need to adjust their approach to ensure they continue to receive their refunds. This change has the potential to impact millions of taxpayers. Let’s take a closer look at the steps you need to take to navigate this shift and ensure seamless access to your tax refunds.
The End of Paper Checks: What’s Changing?
If you’ve grown accustomed to receiving a paper check from the IRS after filing your taxes, it’s time to make some adjustments. Starting September 30, 2025, paper check tax refunds will be completely phased out, and electronic payments will become the standard. This move is part of a broader strategy aimed at reducing costs and increasing efficiency, which was introduced during the Trump administration.
The transition away from paper checks comes after decades of inefficiencies associated with the traditional method. IRS data revealed that more than 1.4 million paper checks were reported lost or stolen in the 2023 fiscal year, creating unnecessary frustration and delays for taxpayers.
These checks would often be delayed in the mail, lost, or even stolen, prompting a lengthy process to recover or replace the funds. In fact, the physical journey of these checks—from being issued to deposited—was increasingly viewed as an outdated process.
Now, refunds will be processed electronically, meaning money will be transferred directly into your account, typically within 21 days. This eliminates the need for a check to travel through the mail and be processed by various entities, making the process faster and more secure.
The Rise of Digital Refund Payments: How Will It Affect You?
The key question for many is: how do you ensure you keep receiving your tax refunds? The IRS has made it clear that electronic payments—via direct deposit or prepaid debit cards—are the future. For most taxpayers, setting up direct deposit is the easiest and most secure method. If you already receive other payments from the federal government via direct deposit, you’re likely familiar with this system.
To make the transition, simply update your banking information when you file your taxes. You can do this through tax software or by filling out Form 8888, which allows you to designate your refund to go directly into your bank account. This change will not only make receiving your refund faster, but it will also minimize the risks of lost or delayed payments.
For those who don’t have traditional bank accounts, prepaid debit cards are another option. Many of these cards come with routing and account numbers, allowing them to accept direct deposits. If you don’t have a bank account, it’s essential to check with your prepaid card provider to ensure that you can receive direct deposits into your card account. This method is becoming more widely available, and many people who are “unbanked” (i.e., don’t have a traditional bank account) will be able to receive their refunds digitally.
What If You Don’t Have a Bank Account? Your Options
According to the FDIC, 4.5% of American households—roughly 5.9 million people—didn’t have a bank account in 2021. For many of these individuals, paper checks were the only option for receiving tax refunds. With the elimination of these checks, it’s important for these households to find alternative ways to receive their money.
Fortunately, the IRS and Treasury Department are making it easier for the unbanked to adapt. Prepaid debit cards that are eligible for direct deposit are a viable option, and they come with low fees in many cases. By using these cards, individuals who don’t have a bank account can still receive their refunds safely and without waiting for a paper check.
Additionally, the IRS is working with fintech companies to offer low-cost or no-cost digital financial services, making it easier for the unbanked to transition to electronic payments. To avoid any delays in receiving your refund, it’s crucial to opt out of paper checks by providing your electronic details when filing your taxes. This small action will ensure that your refund is transferred directly into your account, typically within a few weeks.
