The Internal Revenue Service (IRS) is no longer issuing paper tax refunds starting this month. This announcement came last week, following an executive order from President Trump in March that mandated a shift to fully electronic federal payments.
According to the IRS, by September 30, all federal payments will transition to electronic methods, similar to the Social Security Administration’s move to phase out paper checks in favor of electronic benefit payments.
The agency has outlined its reasons for this change: to combat financial fraud and improper payments, to enhance efficiency, to cut costs, and to bolster security for federal payments.
It’s worth noting that paper checks are significantly more prone to issues — they’re over 16 times more likely to be lost, stolen, or altered compared to electronic payments. Plus, direct deposits help avoid situations where refund checks might be returned to the IRS as non-cashable.
Will the tax filing process change?
Interestingly, the process for filing tax returns will remain unchanged; taxpayers will continue to submit their returns as they normally would, but the delivery will be strictly electronic.
The IRS also indicated that more details will be provided regarding the filing process for the 2025 tax season ahead of the 2026 submission period.
How quickly will electronic transfers be made?
In general, electronic refunds are quicker, typically being issued within 21 days. But to receive a direct deposit, taxpayers must provide their valid bank account information. In contrast, payments sent by mail usually take over six weeks to arrive.
What steps should be taken for receiving an electronic refund?
If you’re looking to get an electronic tax refund, you’ll need to supply the IRS with valid bank account details, including your routing and account numbers. If you don’t already have a bank account, you’ll need to open one at a bank or credit union. The IRS offers resources for locating financial institutions.
Additionally, if you have routing and account numbers, you might also be able to receive payments through your mobile payment provider or a prepaid debit card. For those without access to digital payment options, alternative solutions sponsored by the Ministry of Finance will be available; details on that will come later.
What about payments to the IRS?
Currently, the process for submitting payments to the IRS hasn’t changed. However, the agency plans to broaden its electronic payment options in the future. For now, existing forms and procedures are what you’ll need to use to make payments to the IRS. To prevent delays, it’s advisable for taxpayers to utilize the available electronic payment options.
Individuals can set up IRS direct pay to make payments directly from their bank account at no additional charge. They can also explore options through the Electronic Federal Tax Payment System for personal or business taxes, or utilize the IRS2GO app for debit and credit card payments, including digital wallet choices.
