The IRS is phasing out paper checks — what if I don't have a bank account?

Executive Order 14247, signed in 2025, directed federal agencies including the IRS to transition away from paper checks toward electronic payments. Starting with the 2026 filing season, the IRS strongly encourages all taxpayers to provide direct deposit information for their refunds.

What this means for you:

• If you provide direct deposit info, your refund will be processed electronically as normal
• If you do not provide banking information, you may face delays — paper check processing is being deprioritized
• Paper checks are not completely eliminated yet, but refunds issued via paper check take significantly longer (4-8 additional weeks compared to direct deposit)

If you do not have a traditional bank account, you have options:

1. Prepaid debit card: Many prepaid debit cards have routing and account numbers that work for direct deposit. Cards like Chime, NetSpend, or Green Dot are accepted. Make sure to use the exact routing and account number from your card provider.

2. IRS Direct File or Free File: When using these services, you can designate a prepaid card or mobile payment account that accepts direct deposits.

3. Split refund: You can direct part of your refund to up to three different accounts using Form 8888. This works with savings accounts, prepaid cards, or even to purchase U.S. Savings Bonds.

4. Low-cost bank accounts: Banks participating in the FDIC's Bank On program offer low-fee accounts specifically for unbanked individuals. No minimum balance is required and overdraft fees are limited.

5. Paper check exception: The IRS has said it will still issue paper checks in certain hardship situations. If you have documented reasons why electronic payment is not possible, you may request an exception.

Why is the IRS doing this? The IRS states that paper checks are over 16 times more likely to be lost, stolen, or altered compared to electronic payments. Eliminating paper checks is estimated to save the government hundreds of millions of dollars annually and reduces refund fraud.