The Internal Revenue Service recently announced that paper tax refund checks for individual taxpayers will be phased out beginning on Sept. 30, 2025. This marks another step in the broader transition to electronic payments across the federal government.
The change is designed to
- Protect taxpayers: Paper checks are over 16 times more likely to be lost, stolen, altered, or delayed than electronic payments. Direct deposit also avoids the possibility that a refund check could be returned to the IRS as undeliverable.
- Speed up refunds: Electronic payments give you faster access to refunds, with most IRS payments issued in less than 21 days. Non-electronic payments may take 6 weeks or longer for refunds sent by mail.
- Cut costs: Electronic payments are more efficient and cost less than paper.
What this means for YOU
- Filing stays the same: You should plan to file your 2026 tax return as you normally would, using our free tax help services, free online software, or another filing option.
- Refunds go digital: Most refunds will be delivered by direct deposit or other secure electronic methods. You will have the opportunity to provide your preferred direct deposit information on your tax return or through your individual IRS online account.
- Help for those without access to bank accounts: Options such as prepaid debit cards, digital wallets or limited exceptions will be available. More information will be made available prior to the start of the 2026 filing season.
- Prepare your accounts now: It is more important than ever to bring your banking information with you when getting your taxes prepared. If you do not have an account, consider opening a free or low-cost bank account such as those offered through Bank On Arkansas or your local credit union.
Most people already receive their refunds by direct deposit into their bank accounts. During the 2025 tax filing season, the IRS issued more than 93.5 million tax refunds to individual income tax filers, and 93% of those, almost 87 million refunds, were issued through direct deposit. Only 7 percent of individual refunds were paid by a check through the mail.
