Effective Sept. 30, 2025, the IRS will stop issuing paper refund checks, requiring taxpayers to receive payments electronically, advises DunlapSLK, a CPA and business advisory firm based in Chalfont.

This change means U.S. citizens must have a U.S.-based bank or credit union account to receive refunds through direct deposit, a move designed to speed up payments, improve security, and reduce issues like postal delays or lost checks. While the shift supports the government’s broader modernization efforts, it presents new challenges for certain groups.

For Americans living abroad, foreign bank accounts generally cannot be used for IRS refunds, so opening a U.S.-based account or using a U.S.-friendly financial service will be essential. Executors and trustees may also encounter complications, since the name on an estate account might not match the deceased taxpayer’s return — a mismatch that could block electronic payments. The American Institute of CPAs has urged the IRS to issue clear guidance or exceptions to address these situations.

Social Security recipients have already largely transitioned away from paper checks, with fewer than one percent still receiving them. Those remaining will need to switch to direct deposit or the Direct Express prepaid debit card. Although the IRS has not finalized its outreach plans, it is expected to focus on helping unbanked individuals and others who may face hurdles in making the transition.

The end of paper checks marks a significant shift in how the federal government delivers funds, with the promise of faster, more secure payments. However, for those without a U.S. bank account, living overseas, or managing an estate, preparation will be key to avoiding delays and complications. Setting up electronic delivery now will ensure a smoother transition before the deadline arrives.

Learn more about the federal government no longer issuing paper checks and how it will affect filing your tax returns at DunlapSLK.