IRS Planning Phaseout of Paper Refund Checks
On September 23, 2025, the IRS announced that paper tax refund checks for individual taxpayers will be phased out beginning on September 30, 2025. However, it also indicated that, until further notice, taxpayers should continue using existing forms and procedure for filing 2024 returns on extension.
The IRS has indicated that it will publish detailed guidance for 2025 tax returns before the 2026 filing season begins.
Since the IRS says it will continue to follow existing forms and procedures for 2024 returns that are still being filed, the IRS might still permit paper refund checks to be issued for refunds related to 2024 returns that are on extension and filed after September 30. However, practitioners may still want to encourage those few clients that prefer to receive paper refund checks to switch to direct deposit when they file their 2024 returns that are on extension, just to avoid the possibility of any refund delays that could be caused by the upcoming change in policy.
The IRS estimates that 7% of individual refund recipients received their refund by check through the mail during the most recent filing season.
Once paper refund checks are no longer an option, those taxpayers who used to receive them will instead receive their refunds by direct deposit, but the IRS has indicated that there will be the option to receive refunds in the form of prepaid debit cards for those without access to bank accounts.
The IRS also announced that it will be phasing out the option to make tax payments to the IRS by paper check. For now, the IRS indicated that taxpayers should continue to use existing payment options until further notice. The IRS also indicated that it plans to issue guidance and information for filing 2025 taxes prior to the 2026 filing season.
As a result, it appears that individual taxpayers with balances due on their 2024 returns that are on extension can continue to pay such balances with paper checks, if they prefer. In addition, it also appears that taxpayers who had planned to pay 4th quarter estimated tax payments due on January 15, 2026 with paper checks will also still be permitted to do so. However, practitioners should encourage those few clients who still pay their taxes with paper checks to switch to payment by debit, since it appears that the option to pay by paper check will be ending soon.
Are you registered for one of our upcoming seminars in December and January? If you are not already registered, register here so you’ll be fully prepared with what you need to know, including the major new federal tax law enacted on July 4th.