WASHINGTON – The IRS has launched a massive modernization effort for the 2026 tax season that could leave millions of Americans waiting weeks longer than usual for their money. Under a new federal mandate, the agency is aggressively phasing out paper checks, making direct deposit the mandatory default for nearly all individual tax refunds.
For the 2025 tax year (being filed now in 2026), the IRS will no longer automatically mail a paper check if a taxpayer leaves their bank information blank or if a direct deposit is rejected. Instead, the agency will “freeze” the refund until the filer provides valid electronic banking details.
The New “Refund Freeze” Process
In previous years, missing bank info simply triggered a mailed check. Now, if the IRS cannot process a direct deposit, the following occurs:
- The Freeze: Your refund is placed on hold immediately.
- CP53E Notice: The IRS will mail you a CP53E Notice explaining that your refund is frozen.
- The 30-Day Window: You are given 30 days from the notice date to log into your IRS Online Account and provide accurate routing and account numbers.
- The Last Resort: If you do not respond within 30 days, the IRS will only then begin the process of issuing a paper check—a secondary delay that typically takes an additional six weeks.
Who is Most at Risk?
While 93% of taxpayers already use direct deposit, the remaining 7% (roughly 6.5 million people) face a significant hurdle. Financial experts warn that older taxpayers, those without traditional bank accounts, and international filers may struggle most with the transition to a digital-only system.
Important Exception: Limited waivers exist for international taxpayers, minors, and those with religious objections, but these often require a manual request through the IRS main phone line (800-829-1040).
Refund Spotlight: The $1,700 EITC & CTC Payment
For low-to-moderate-income families, the stakes are even higher. The IRS has confirmed that many filers qualifying for the Earned Income Tax Credit (EITC) and the Additional Child Tax Credit (ACTC) may be eligible for a refundable credit of up to $1,700 per child.
However, by law, these specific refunds cannot be released before March 2, 2026. If these families also fail to provide direct deposit information, their vital payments could be pushed back into late April or May.
How to Guarantee a Fast Refund
To ensure you receive your money within the standard 21-day window, the IRS recommends these four steps:
- Verify Your Digits: Double-check your routing and account numbers; a single typo now triggers a freeze rather than a mailed check.
- File Electronically: E-filing is the only way to ensure your return is processed in time to catch potential errors.
- Use Digital Alternatives: If you don’t have a bank account, use a prepaid debit card or mobile payment app that provides a routing and account number.
- Monitor Your IRS Account: Check your status online weekly to catch the CP53E notice as soon as it is issued.