IRS tax refund delays: Millions may wait longer as paper checks are phased out

Millions of Americans may get their tax refunds late because the IRS is moving away from paper checks. Earlier, taxpayers could easily choose to get their refund as a paper check, but now the IRS wants most people to use direct deposit. This change matters because in 2025 the IRS sent out more than 93.5 million tax refunds. About 93 percent of those refunds, nearly 87 million, were already sent through direct deposit.

This means around 6.5 million Americans still using paper checks will now have to switch to direct deposit, as the paper check phaseout started late last year, Newsweek reported. Under the new rule, tax returns without direct deposit details will still be processed, but the refund money will be frozen until details are added. The IRS will also freeze refunds if a bank rejects a direct deposit, and it will not automatically send a paper check, the agency said. These frozen refunds could be delayed by several weeks.

Refund freeze rules explained

People without bank accounts are not fully blocked from getting refunds, said Michael Ryan, founder of MichaelRyanMoney.com, speaking to Newsweek. Ryan said prepaid debit cards, mobile payment apps, and other electronic options can still work for refunds. He added that the IRS is allowing some exceptions, but the process will still feel slow and frustrating. If a refund is frozen, the IRS will send a CP53E notice asking taxpayers to update their direct deposit details online.


Taxpayers usually get 30 days to respond to this notice. If they do not respond within 30 days, the IRS will wait another six weeks before finally sending a paper check. Some people are worried this change could hurt older taxpayers who may struggle with online banking. Kevin Thompson, CEO of 9i Capital Group, said families may need to help older relatives with this transition.

Why refunds get delayed

Alex Beene, a financial literacy instructor, said most refund delays happen because people enter wrong bank or routing numbers. Beene said there is no need to panic because the IRS will notify taxpayers and allow them time to fix mistakes, according to Newsweek. Ryan warned that a delayed refund can seriously hurt people living paycheck to paycheck, especially when refunds are used for rent or emergencies.

Thompson said any rejection of direct deposit will cost time, and delays can easily go beyond six weeks if issues are not fixed quickly. Americans are being advised to double-check bank details and choose direct deposit to get refunds faster, according to experts cited by Newsweek.

Thompson also said taxpayers must still file taxes by April 15 even during a partial government shutdown. He added that the IRS is currently funded through Inflation Reduction Act money until February 7, and more funding may be needed later.Thompson stressed that government shutdowns do not change tax filing or payment deadlines.

FAQs

Q1. Why are some IRS tax refunds getting delayed?

Some refunds are delayed because the IRS now wants direct deposit and freezes refunds if bank details are missing or rejected.

Q2. Can I still get a tax refund without a bank account?

Yes, the IRS allows options like prepaid debit cards or other electronic methods, but the process may take longer.