The Internal Revenue Service (IRS), working with the Treasury Department, will phase out paper tax refund checks beginning at the end of this month to comply with an executive order that directs agencies to transition away from paper-based processes.
Refunds made to individual taxpayers will be entirely electronic as part of the agency’s first step to transition to electronic payments, the IRS said on Sept. 23.
The order signed by President Donald Trump in March directed the Treasury Department to transition to electronic payments for as many federal disbursements as possible. Beyond tax refunds, that includes payments made between government entities, benefits, and checks made to vendors.
Most taxpayers already receive funds electronically, with 93% of individual tax refunds issued through direct deposit during the 2025 filing season, according to the IRS.
The move also improves security, according to the White House and Treasury Department, which said that paper checks are 16 times more likely to be reported lost or stolen than electronic funds transfers.
“Maintaining the physical infrastructure and specialized technology for digitizing paper records cost the American taxpayer over $657 million in Fiscal Year 2024 alone,” said the White House in March.
For the upcoming 2026 filing season, the IRS said it will publish “detailed guidance for 2025 tax returns,” and that, “Until further notice, taxpayers should continue using existing forms and procedures, including those filing their 2024 returns on extension of a due date prior to Dec. 31, 2025.”
Options for those without access to bank accounts will include prepaid debit cards, digital wallets, or “limited exceptions,” according to the IRS press release.
The Social Security Administration (SSA) will also no longer issue paper checks starting in October to comply with the March order.
Nearly 400,000 social security recipients receive their payments through paper checks, though this only accounts for around 1 percent of all recipients, according to SSA.
Last week, the agency said that for those who “have no other way to receive payments” other than through paper-based means, SSA “will continue to issue paper checks,” adding that there “are no plans to pause any payments starting October 1.”