Key points covered in this article:
- Beginning in the 2026 filing season, the IRS will phase out paper tax refund checks for individual taxpayers, transitioning to secure electronic refund methods like direct deposit, prepaid debit cards, and digital wallets.
- Electronic refunds offer faster access to funds, enhanced security against fraud, and reduced government costs compared to paper checks.
- Taxpayers are encouraged to prepare by ensuring their banking information is accurate or exploring alternative options like prepaid cards or digital wallets.
The way individual taxpayers receive refunds from the IRS is changing. Based on a recent announcement, the agency will begin phasing out paper tax refund checks for individual taxpayers for the 2026 filing season. This initial step is part of a broader government-wide transition to electronic payments mandated by Executive Order 14247.
For the 2026 tax filing season, the primary focus is on how taxpayers receive money from the government, not how they pay it. This move toward digital refunds aims to provide taxpayers with faster, more secure access to their money while reducing costs and potential fraud associated with paper checks.
What’s Changing for Individual Tax Refunds?
Starting with the 2026 filing season, which covers 2025 tax returns, the IRS will stop issuing paper checks for individual tax refunds. Instead, refunds will be delivered through secure electronic methods. According to an IRS news release, this change is designed to enhance the taxpayer experience by modernizing the refund process.
It is important to note that this update specifically targets refunds for individual filers. While the executive order also applies to payments made to the IRS, the agency has clarified that taxpayers should continue using existing payment options until further guidance is issued.
What’s not Changing for Individual Taxpayers?
According to the IRS announcement, several key aspects will stay the same for individual taxpayers. Filing methods and procedures remain unchanged, so taxpayers can continue to file their federal returns using current forms and existing electronic or paper filing options. Existing payment methods for paying federal taxes are also not affected at this time, taxpayers should keep using available IRS payment options until further notice.
Several choices are available for individuals to suit different situations:
Additionally, this change only applies to federal tax refunds; state tax refund procedures remain governed by each state’s own rules and are not impacted by the new federal policy.
The Benefits of Going Digital with Your Refund
The shift away from paper checks offers significant advantages for taxpayers. The IRS has highlighted several key benefits of this modernization effort.
Enhanced Security and Protection
Electronic payments are substantially more secure than paper checks. The IRS notes that paper checks are over 16 times more likely to be lost, stolen, or fraudulently altered. Direct deposit eliminates the risk of a check being misplaced in the mail or returned to the IRS as undeliverable due to an incorrect address. This ensures that your refund goes directly to you without unnecessary risk.
Faster Access to Your Money
One of the most compelling reasons for the switch is speed. Taxpayers who file electronically and choose direct deposit can receive their refunds in less than 21 days, provided there are no issues with their return. In contrast, waiting for a paper check can take six weeks or longer. Electronic transfers put money into taxpayers’ hands much faster.
Reduced Government Costs
Moving to digital refunds is also a cost-saving measure for the government. Processing electronic payments is more efficient and less expensive than printing and mailing millions of paper checks each year. These savings contribute to a more streamlined and responsible use of public funds.
How to Prepare for Electronic Refunds
Individual taxpayers can take simple steps now to ensure a smooth transition for the 2026 filing season. The good news is that most taxpayers are already prepared. During the 2025 filing season, 93% of individual refunds, nearly 87 million, were issued via direct deposit.
For those who still receive paper checks, here are the primary options available for receiving an electronic refund.
Direct Deposit
This is the simplest and most recommended method. Taxpayers can have their refund deposited directly into a checking or savings account. To use this option, you will need your bank account number and routing number when you file your tax return.
Non-Bank Account Options
For individuals without a traditional bank account, options such as a prepaid debit card and digital wallets will be available. Additionally, the FDIC’s GetBanked page and the National Credit Union Administration’s MyCreditUnion.gov site offer resources for finding free or low-cost account options.
What to Expect Next
The IRS has committed to publishing detailed guidance for filing 2025 tax returns well before the 2026 filing season begins. Until that information is released, taxpayers should continue to follow existing procedures for filing their returns. This includes those filing their 2024 returns under an extension.
The agency will provide updates on IRS.gov and through nationwide outreach efforts to ensure everyone is aware of the changes. It is crucial to remember that the IRS will not initiate unsolicited contact via email or text to ask for personal or financial information. Be wary of phishing scams that may try to exploit this policy change. PBMares will share further client updates on the new procedures for filing 2025 tax returns and the 2026 filing season as soon as the IRS releases additional guidance.
This transition marks a significant step in modernizing how the federal government interacts with taxpayers. By preparing now and ensuring your information is ready for the upcoming filing season, you can take full advantage of a faster, safer, and more efficient refund process.
For the most up-to-date information and resources on these changes, visit the U.S. Department of the Treasury’s official resource page.
Additional updates will be coming from PBMares; stay tuned at PBMares.com.
