So much of our financial life happens online these days: from banking, to getting a paycheck, to making rent or mortgage payments.
And most stores don’t even give you a paper receipt anymore. You just tap your phone or swipe your card, wait for the transaction to be approved, and you’re good to go.
So it makes sense that tax refunds are going the digital route, too. As of September 30, 2025, the IRS began phasing out the paper check tax refund for most individual taxpayers.
That means you may notice a change when you file your 2025 taxes in 2026. Instead of receiving a paper check in the mail, most taxpayers will get their refund through direct deposit or another electronic method.
Why is the IRS phasing out paper checks?
It’s mostly about cutting costs, reducing fraud, and boosting security. Electronic payments are also faster, safer, and cheaper for the government to process, and for taxpayers to receive.
And this new digital-only requirement isn’t limited to tax refunds. The government plans to move to paperless payments for everything, including Social Security and other federal benefits, as well as any payments made to the IRS.
If your tax refund is already direct-deposited into your account, the shift away from paper check tax refunds won’t be a big deal.
But if you’re still receiving paper checks from the IRS, or you know someone who is, this update could mean you need to make some changes to ensure you get your tax refund from here on out.
In this article, we’ll explain what’s changing, why the IRS paper tax refund checks phaseout matters, and what you can do to make sure your refund gets to you quickly and securely.
What Is a Tax Refund?
When you file your taxes, the government looks at how much you already paid throughout the year versus how much you actually owe. If you paid too much, you get the extra back. That’s your tax refund.
Most people pay their taxes gradually during the year, often through money that comes out of your paycheck. But if too much is taken out, the difference comes back to you after you file your tax return.
For many households, that refund can make a real difference.
In 2025, the average refund was around $3,200. That kind of one-time windfall can go a long way toward paying bills, boosting savings, or managing unexpected costs.
A Brief Look Back
Income taxes didn’t always work the way they do today.
Before the 1940s, people paid their taxes all at once at the end of the year, which was stressful and hard to plan for. During World War II, the government started requiring employers to collect taxes little by little from paychecks over the course of the year.
That made things easier, but it also meant many people ended up paying more taxes than they owed—leading to refunds.
For decades, those refunds were sent by paper checks in the mail.
Starting in the 1990s, direct deposit came onto the scene, and refunds that once took weeks were processed within days and put straight into taxpayers’ bank accounts.
By the early 2000s, most people began filing taxes online (e-filing), further speeding up the refund process.
Today, most people use these faster, digital methods to file their taxes and get their refunds. But millions still get paper check tax refunds. That’s the part the IRS is phasing out.
Why Is the IRS Phasing Out Paper Checks?
In 2025, 93% of individual tax refunds—almost 87 million—were sent through direct deposit. Paper checks were already the exception.
So the IRS made it official. As of September 30, 2025, it required most individual taxpayers to receive their refunds electronically.
Why the change?
- It’s safer. Paper checks are more than 16 times more likely to be lost, stolen, or tampered with than direct deposit. Electronic payments also avoid the risk of checks being returned as undeliverable.
- It’s faster. If you file electronically and choose direct deposit, you can get your refund in less than 21 days.
- It saves money. Printing and mailing checks costs the government more. Electronic payments are cheaper and more efficient for everyone involved.
What you would call a win-win situation.
What the New Rules Say
By the end of 2025, most individual taxpayers were receiving their refunds by direct deposit.
When you file your tax return, you’ll include your banking information so the IRS knows where to send your refund. If you don’t provide that info and don’t qualify for an exception, your refund will still come, but it could take about six weeks longer because the government has to issue and mail a paper check tax refund.
This refund shift is just the first step.
The federal government is moving toward electronic delivery for all kinds of payments, including Social Security benefits, veterans’ payments, and more.
As things evolve, we’ll keep you updated on what’s happening and what it means for you. Stay tuned.
How To Be Digitally Ready
Most taxpayers already file online and use direct deposit. But if you’re among the few who still receive a paper check tax refund—or just want to double-check you’re set up for digital delivery—here are a few simple steps.
Open a Digital Account
As a reminder, to get your refund electronically, you’ll need to provide banking information when you file your next tax return. That means a U.S.-based checking or savings account with an account and routing number (the nine-digit number that identifies your bank).
If you already have an account that accepts electronic transfers like direct deposit (and most do these days), you’re ready.
If not, now’s a great time to open one. Kudzu offers low-fee digital banking that’s easy to set up and built for people who want a simpler way to manage their money.
Explore Electronic Alternatives
No bank account? You’ve still got options. The IRS will also accept approved digital wallets or reloadable prepaid debit cards. Just make sure your provider accepts IRS deposits.
Use Form 8888 to Split Your Refund
Want to send part of your refund to your savings account and the rest to your checking? You can totally do that. All it takes is a little paperwork.
Complete IRS Form 8888 and file it with your tax return. This form lets you split your refund into up to three accounts.
Form 8888 only works for electronic payments, but it’s a smart way to use automation to reach your goals—like depositing part of your refund directly into savings so you’re not tempted to spend it.
If electronic payment truly isn’t an option for you and you need to rely on paper checks, the IRS does allow exceptions in certain cases. We’ll be watching for additional guidance on how those will work, due out before the next tax filing season.
The Future of Digital IRS Payments
The IRS’s move away from paper check tax refunds isn’t happening in a vacuum. It’s part of Executive Order 14247, which directs federal agencies to modernize how payments are delivered—starting with tax refunds.
Over the next few years, the way you pay your taxes might change, too. New digital options are expected as early as 2027.
Getting comfortable with digital accounts and payment tools now can help you stay ahead of the curve, so you’ll be prepared when these shifts happen.
Take Control of Your Tax Refund
The IRS is going digital, and that’s good news for your wallet at tax time (that is, if you’re expecting a refund!).
Electronic deposits are faster, safer, and more reliable than paper check tax refunds. With a few simple steps, you’ll be ready to make the most of the IRS paper tax refund checks phaseout.
Here’s how to get set:
- Make sure you have a bank account, prepaid card, or digital wallet that can receive direct deposits.
- Have your account and routing numbers ready when you file your taxes.
- Use Form 8888 if you want to split your refund and contribute a portion to savings.
- Check IRS.gov for updates if you still need paper checks and think you may qualify for an exception.
Your tax refund is yours. You earned it. Opening a digital account now means no delays, no paper check limbo, and no missed opportunities to put that money to work.
If you already have a direct deposit–ready account, you’re ahead of the game. If not, Kudzu offers a simple way to get one—no credit check, no monthly minimums, just a fast setup so you’re ready when your refund hits.
Whether you’re filing taxes for the first time or just want more control over where your money goes, Kudzu can help you take that next step with confidence. Download the Kudzu app and get ready for a stress-free tax season (at least when it comes to getting your refund!).
