It’s been a long time coming…
The U.S. Treasury announced in September that starting October 1, 2025, taxpayers will no longer be able to receive a paper refund check after filing their federal income tax return, subject to certain exceptions.
The change was implemented pursuant to President Donald Trump signing Executive Order 14247 on March 25, 2025. A copy of the EO can be found by visiting the White House website here.
The EO highlights that paper checks issued by the Treasury Department are 16 times more likely to be reported lost, stolen, or returned as undeliverable. These issues encourage U.S. individuals to electronically file their Form 1040 and set up direct deposit of their refund checks.
How Many Taxpayers are Affected by This Change?
During the 2025 filing season, meaning 2024 tax returns filed during 2025, 93% of the 93.5 million refunds issued were sent to taxpayers electronically via direct deposit, which leaves roughly 7% of U.S. taxpayers who still received a refund via paper check from the Treasury.
Electronic refunds typically arrive in under 21 days for e-filed returns without issues, compared to up to six weeks or more for mailed checks.
While the phase-out applies immediately to new refunds for the 2025 tax year (filed in 2026), some flexibility remains. Exceptions are available for cases where electronic payments are not feasible, such as for unbanked individuals, emergencies causing undue hardship, or security-related needs, as determined by the Treasury Secretary.
How to Claim an Exemption?
There is no guidance yet for how an individual may claim an exemption when they file their 2025 tax returns in 2026. We imagine there will be a new IRS form available that allows the taxpayer to make a valid claim, which still allows the delivery of a paper refund check instead of a direct deposit of the refund.
Worst-case scenario – the taxpayer can choose to apply the refund amount to their next year’s tax return. Although the taxpayer won’t receive the tangible benefit of the cash being delivered to them, they will still get credit for the refund, having it apply to their 2026 taxes. When filing their 2026 tax return in 2027, the taxpayer can input their direct deposit details (assuming they have a bank account) or complete the waiver to receive a paper refund check.
