IRS Phasing Out Paper Refund Checks: What Taxpayers Need to Know

The Internal Revenue Service (IRS) is moving away from issuing paper refund checks, a change driven by Executive Order 14247. This shift aims to modernize payment systems and improve efficiency. While the transition is underway, taxpayers need to understand how it might affect them and what steps they should take. The IRS is encouraging most taxpayers to use electronic methods for receiving refunds.

Understanding the Shift to Electronic Refunds

The IRS is transitioning most taxpayers to electronic refunds under Executive Order 14247. This means that instead of receiving a paper check in the mail, refunds will be sent directly to a bank account via direct deposit. Other secure electronic methods, such as prepaid debit cards or digital wallets, may also be used in some cases. This move is part of a broader effort to update payment processes and reduce reliance on paper-based transactions.

The agency has not provided a specific end date for the complete phaseout of paper checks, but the process began in late 2025. Taxpayers are advised to file their returns as usual and ensure they have bank information ready for direct deposit. For those without bank accounts, the IRS suggests exploring free or low-cost options available through resources like FDIC GetBanked and MyCreditUnion.gov.

Delays and Processing Changes in 2026

During the 2026 filing season, paper refund checks experienced significant delays. On average, these checks took 36 days to issue in early April 2026, a notable increase from the 13 days it took a year earlier. The Government Accountability Office (GAO) linked these slower processing times to the IRS’s move away from paper payments.

Several factors contributed to these delays. The IRS processed about 98% of the 177 million returns it received, with 95% of these coming in electronically. However, the unit responsible for processing paper returns saw a reduction in staff, ending the season with 18% fewer employees compared to the previous year. Issues with processing systems and reduced staffing at Taxpayer Assistance Centers also played a role in slower paper-return processing.

How Taxpayers Can Track Refunds and Stay Informed

Despite the changes, taxpayers can still track their refunds and manage their tax payments effectively. The IRS encourages individuals to use the “Where’s My Refund” tool on the IRS website. For electronically filed returns, refund status typically appears about 24 hours after filing. For mailed returns, it may take around four weeks for the status to become available.

It is important for taxpayers to open and respond to any mail they receive from the IRS promptly. Notices often include deadlines for response, and failing to meet these can affect refund processing. The IRS also advises taxpayers to continue using their current payment methods until updated guidance is provided on IRS.gov/modernpayments.

Potential Exceptions and Concerns

While the IRS states that the shift to electronic refunds applies to “most taxpayers,” the specific exceptions are not clearly defined in public guidance. Organizations like the AICPA have raised concerns with the Treasury Department, requesting clearer instructions and potential exceptions for certain groups. These include Americans living overseas, who may face difficulties receiving electronic refunds, as well as executors and trustees managing estate or trust returns. These concerns highlight potential challenges for individuals with less common financial situations or international addresses.

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