IRS to Eliminate Paper Checks Starting September 30, 2025

Starting September 30, 2025, the IRS will no longer accept paper checks for tax payments or issue paper checks for refunds, marking a major shift in how federal taxes are paid and refunded.

What This Means for You

If you currently mail paper checks to the IRS or receive your tax refund by check, this change affects you:

• You’ll need to pay any tax due electronically—including estimated tax payments, balances due, and extension payments.
• You’ll need to receive tax refunds by direct deposit to a valid U.S. bank account.

⚠️ Note: This change applies to federal taxes only. State tax agencies (like the California FTB or New York State) may still allow paper checks, unless they adopt similar policies in the future. That said, Evolution Tax & Legal always recommends electronic filing for secure and timely payments and refunds.

Approved Electronic Payment Methods

The IRS offers several secure options to pay taxes electronically, including:

1. IRS Direct Pay (ACH transfer): Pay directly from your checking or savings account here: https://www.irs.gov/payments/direct-pay

2. EFTPS (Electronic Federal Tax Payment System): A free federal payment platform, useful for recurring payments: https://www.eftps.gov

3. Direct Debit through your tax return: When we e-file your return, we can schedule the payment directly from your bank account.

Refunds Will Require a U.S. Bank Account

The IRS will no longer issue paper refund checks. Instead:

• Refunds will be issued via direct deposit to the U.S. bank account you specify when your return is filed.
• You’ll need to provide accurate routing and account numbers for a checking or savings account.

Expat or International Considerations

Many expats rely on foreign bank accounts or prefer paper checks due to limited access to U.S. financial institutions. With this new rule, those options will no longer be viable.

If you’re living overseas, here’s what you need to know:

• You must use a U.S. bank account for any IRS tax payments or refunds. The IRS does not issue international wire transfers, and foreign bank accounts cannot be used for ACH or EFTPS transactions. Your U.S. bank account must have a U.S. routing number, a U.S. account number, and accept non-resident members.
• Refunds must be direct deposited to a valid U.S. checking or savings account. If you haven’t used direct deposit before, this may require coordination with a U.S.-based bank or financial institution.
• Delays may be more common for international filers, especially if there are issues with identity verification, mailing addresses, or additional compliance forms (like FBAR or FATCA).
• If you’re concerned about access or setup, we strongly recommend confirming your U.S. banking information as early as possible in the 2025 tax season.

Common Expat Banking Solutions:

1. Digital-First Banks: Many online banks accept international applicants without requiring a U.S. address.
2. Credit Unions: Some credit unions serve international communities, designing programs specifically for expats.
3. Global Banking Platforms: Some multinational banks offer accounts accessible from multiple countries.

IRS-Approved Banking Alternatives:

If you don’t have a traditional U.S. checking or savings account, you may still have options that meet the IRS’s electronic payment and refund requirements. Below are a few alternatives to consider:

1. Digital Wallets (Payments Only): You can make tax payments using PayPal or Click to Pay, but only through IRS-approved third-party payment processors (such as PayUSAtax, ACI Payments, or Pay1040).
2. Prepaid Debit Cards: Some prepaid cards from Visa, Mastercard, or American Express offer valid U.S. routing and account numbers, making them eligible to receive IRS refunds via direct deposit.
3. PayPal “Direct Deposit” Option: PayPal does offer a Direct Deposit feature that assigns a routing and account number to your PayPal balance. In some cases, this may allow IRS refunds to be deposited into your PayPal account. The IRS does not guarantee this option.
4. Direct Express® Card – Not Eligible: The Direct Express® Debit Card, issued by the U.S. Treasury for Social Security and other federal benefits, cannot be used to receive tax refunds or make tax payments.

How We’re Helping

We know this is a change for some clients, particularly those who have always preferred paper checks. As part of our process:

• We will confirm your bank information at the time we file your tax return or estimates.
• We can assist you in setting up IRS Direct Pay or EFTPS, depending on your needs.

For a video tutorial on how to make an electronic payment, please click here.

Why This Is Happening

This change is the result of an Executive Order signed in April 2025 that directs federal agencies to reduce costs and modernize operations.

The move to electronic payments is reported to reduce the risk of fraudulent and lost payments while saving taxpayers an estimated $657 million in printing and mailing costs.

Next Steps for Clients

You don’t need to do anything today— but before your next payment or refund is processed:

• Be ready to share your U.S. bank routing and account information.
• Choose an approved electronic payment method.
• Let us know if you have any concerns or questions about setting up your payment method.

We look forward to supporting your 2025 tax consulting and preparation needs.