As the 2026 tax filing season approaches, the Internal Revenue Service (IRS) is urging taxpayers to prepare for a significant change in how refunds are delivered. Following an executive order signed last year by President Trump, the agency is moving to phase out paper checks for federal payments, including tax refunds.
The order mandates the modernization of all federal disbursements to improve security and efficiency. The IRS notes that paper checks are “16 times more likely” to be lost, stolen, or altered compared to electronic transfers. The cost difference is also substantial: issuing a paper refund check costs taxpayers over $1, while a direct deposit costs only about 10 cents.
“This year, we are strongly encouraging everyone to use direct deposit,” the IRS stated in its annual filing season guidance issued Tuesday. The shift affects all federal benefit and payment programs, including Social Security and Veterans Affairs, but is now being emphasized for the upcoming tax season.
Taxpayers who have used direct deposit in previous years will see no change in their process. However, individuals without a bank account are advised to open one to avoid delays. For those unable to use a traditional account, the IRS outlines several alternatives:
- Refunds can be routed to mobile payment apps or prepaid debit cards that provide routing and account numbers.
- Funds may be deposited directly into traditional, Roth, or Simplified Employee Pension (SEP) IRAs.
- Eligible individuals may qualify for a Treasury-sponsored option such as the Direct Express® Debit Mastercard®.
The IRS confirms that taxpayers who opt for direct deposit typically receive their refunds within three weeks. Those who require a paper check due to exceptional circumstances could face a significantly longer wait—potentially six weeks or more.
Additional guidance and the official start date for the 2026 filing season are expected later this month. Last year, the IRS began accepting returns on January 27.
