Your tax refund will no longer arrive by paper check. The IRS recently announced that it will stop issuing refund checks, with limited exceptions. It will require taxpayers to receive refunds electronically. The transition process for federal agencies actually began last September.
Why the Change?
Paper checks cost more, create security risks, and take much longer to process. In addition, the Trump administration directed by executive order all federal agencies to eliminate paper check payments.
What Stays the Same?
The IRS has not changed the process for filing your tax return. You will continue to file exactly as you do now either by e-filing or by mailing a paper return.
How to Receive Your Refund
The fastest and most reliable way to receive your refund is through direct deposit into your bank account. Ninety-three percent of taxpayers already use direct deposit, and this change will not affect them. I have used this direct deposit process for years. I never had an issue, and I appreciated getting the refund quickly.
For direct deposit, you may use a checking or savings account, an IRA (traditional, Roth, or SEP), a health savings account (or HSA), or a Coverdell education savings account. You will just need a 9-digit routing number, and the account number.
If you currently receive paper refund checks, switch to direct deposit when you file your 2025 return. Simply enter your bank’s routing and account numbers on your tax form. If you file a joint return, I recommend using a joint account to receive the refund. However, I know of clients who used a separate account and successfully received a joint refund check.
If you prefer not to use direct deposit, there are options. Taxpayers who do not have access to bank accounts can be paid by other digital methods, such as prepaid debit cards, digital wallets, or mobile payment apps.
IRS officials have stated that the agency will establish a dedicated phone extension for taxpayers to call the IRS and request a waiver. Taxpayers will also be able to log in to their individual online account on the IRS website and indicate why they cannot provide banking information.
The IRS will still issue a paper check if you request a waiver because you lack access to banking services or electronic payment systems. Keep in mind that paper checks take at least six weeks to process, while electronic refunds typically take about 21 days. In my experience, the majority of my clients who are getting a refund receive the deposit with two weeks of the return being accepted.
If You Need a Bank Account
You can open an account online through several resources:
· The FDIC’s GetBanked website
· The National Credit Union Administration’s Credit Union Locator
· The Veterans Benefits Banking Program (for veterans only)
Paying Taxes
For now, the IRS will still accept tax payments by check. However, electronic payments remain the faster and more reliable option. To review all electronic payment methods, visit the IRS Make a payment web page. For a number of years, I make both tax return payments (when not receiving a refund…..), and estimated tax payments via the IRS website. You will get an online receipt when the payment is made that you can print for your records. If youy provide an email address, you will get an acknowledgment email as well.