Starting September 30, 2025, the IRS, Social Security Administration (SSA), and other federal
agencies will stop issuing paper checks for tax refunds and benefit payments. From that date
forward, all payments will be delivered electronically.
This shift is designed to reduce costs, speed up payments, and curb fraud. But it also means some
taxpayers will need to take action to avoid disruptions.
Why the Change?
For decades, many Americans have relied on paper checks for tax refunds and Social Security
benefits. In March, President Trump signed an executive order mandating a transition to fully
electronic payments.
The reasons are clear:
Fraud prevention: Paper checks are up to 16 times more likely to be stolen, lost, or
altered than direct deposits.
Cost savings: Eliminating paper processing reduces administrative expenses.
Efficiency: Digital transfers reach taxpayers faster and more securely.
The Biggest Hurdle: The “Unbanked”
Roughly millions of Americans lack bank accounts due to fees, accessibility, or mistrust of
banks. This group will face the steepest adjustment.
To ease the transition, the government may expand prepaid debit card programs and promote
low-cost banking options. Still, unbanked individuals are encouraged to open accounts well
before the deadline to prevent delays.
⚠️ Note: If you filed an extension for your 2024 tax return and submit it after September 30,
2025 (due October 15, 2025), you’ll fall under the new no-paper-check rule.
What This Means for You
Here are the key changes most taxpayers will see:
1. Direct deposit is mandatory — Refunds and benefits must go to a U.S.-based bank or
credit union account.
2. Refunds will arrive faster — No more postal delays or lost mail.
3. Enhanced security — Eliminates risks of check theft and forgery.
Special Considerations
Taxpayers abroad: U.S. citizens overseas may face hurdles since IRS payments
typically cannot be deposited in foreign banks. Future guidance is expected.
Estates and trusts: Executors could encounter complications depositing refunds into
estate accounts. Professional groups have requested more flexible rules from the
Treasury.
Privacy concerns: Some individuals remain uneasy about sharing banking details with
the IRS, though electronic transfers are generally more secure.
Social Security Recipients
Nearly all SSA beneficiaries already use direct deposit. Those still receiving paper checks must
switch soon—either to direct deposit or to the Direct Express® prepaid debit card—to avoid
interruptions.
Preparing for the Transition
The government will issue additional guidance and outreach to help taxpayers adapt. Still, it’s
wise to prepare now:
Confirm your bank information with the IRS or SSA.
Explore low-cost banking if you’re currently unbanked.
Seek professional advice if you’re abroad, handling an estate, or have unique
circumstances.
The September 30, 2025 deadline marks a major milestone in how the federal government
processes payments. By acting early, taxpayers can ensure a smooth transition to the faster, safer,
and more reliable electronic system.
