Update on IRS Electronic Payments and Paper Checks

Note: This tax update applies to individual taxpayers only – not business taxpayers.

The IRS continues to move toward complying with Executive Order 14247 “Modernizing Payments To and From America’s Bank Account” signed earlier this year.  The IRS will phase out paper tax refund checks for individual taxpayers beginning on 9/30/25. Most refunds will be delivered by direct deposit or other secure electronic methods. There will be several options for those without access to bank accounts, such as prepaid debit cards and digital wallets. There will be “limited exceptions” to the paperless refund policy, but the IRS encourages taxpayers who are unbanked to consider opening a free or low-cost account.

Regarding payments made to the IRS, individual taxpayers should continue following their existing desired procedures (e.g. paper checks) until further guidance on payments to the IRS are released.  To be clear, the phasing out of paper check refunds for individual tax returns on 9/30/25 only applies to refunds from the IRS to taxpayers.  It does not apply to taxpayers making payments to the IRS.  The executive order mandates that the IRS must establish rules and a public awareness campaign before removing the option for individual taxpayers to send paper checks for tax payments (electronic payment required), however, that has not occurred as of today.

If you have already filed your 2024 tax return or do not anticipate a refund, there is no impact to you right now.  However, please prepare for the future when paper check payments to the IRS will no longer be allowed.  GFC will be communicating more details as they become available, along with a timeline.  As always, please reach out to your GFC tax team with any questions.