The end of most paper checks for Social Security, federal income tax refunds is here

The federal government is moving one step closer to getting out of the business of handing out paper checks, effective Sept. 30.

We’re talking about the end of paper checks for tax refunds, as well as Social Security and veterans benefits for most, but not all, people. And down the line, the Internal Revenue Service wants to move away from receiving a check when you owe taxes, too.

On March 25, President Donald Trump signed an executive order to put a stop to paper checks to the extent permitted by law, indicating that issuing paper checks “imposes unnecessary costs; delays; and risks of fraud, lost payments, theft, and inefficiencies.”

The executive order noted that mail theft complaints have increased substantially in the past five years. According to the U.S Department of Treasury, paper checks are “16 times more likely to be reported lost or stolen, returned undeliverable, or altered than an electronic funds transfer.”

Issuing a paper check costs about 50 cents, according to the Treasury Department. The cost drops down to less than 15 cents per electronic transfer.

The goal is to get more people using direct deposit, payments onto debit and credit cards, digital wallets and other electronic payment options for receiving their federal income tax refunds and benefits.

What’s next for Social Security and paper checks?

Fortunately, most people receiving Social Security benefits already obtain their money through direct deposit at their bank or credit union. Or they opt for the Direct Express card, a debit card that is used to access the money when you don’t have a bank account.

Right now, less than 1% of Social Security Administration beneficiaries currently receive paper checks, according to the federal agency.

More than 390,800 people continued to receive Social Security checks in the mail based on data from Social Security as of September.

According to the list, California had more than 43,000 beneficiaries receiving checks; Texas had more than 28,000, and Florida had more than 24,000 beneficiaries receiving checks.

Earlier this spring, the Detroit Free Press, part of the USA TODAY Network, reported that 477,731 people nationwide received a paper check for their Social Security payments, according to government data from May. In Michigan, 13,349 Social Security beneficiaries out of about 2.4 million relied on checks in May.

The Social Security Administration is “proactively contacting those beneficiaries to alert them about the change and the process to enroll in direct deposit or receive Direct Express cards,” according to a Social Security spokesperson.

Those receiving money by check are also seeing an insert with benefits checks that offers steps to transition to electronic payments, according to a Social Security blog online.

Matthew Bilenki, director of finance and management at the Social Security Administration, indicated that more than 692,000 individuals nationwide received benefits via paper check in July.

Bilenki spoke Sept. 24 at the Financial Literacy and Education Commission public meeting in Washington, D.C.

He noted that the Social Security Administration has been actively reaching out in a variety of ways, including emailing directly, to those who are still receiving benefits via a paper check, instead of by direct deposit. Many people, he said, have already responded and converted to direct deposit.

But he also stressed that Social Security checks will not be cut off as of Sept. 30 for those who have yet to make the switch.

“If you have no other way to receive payments, we will continue to issue paper checks. There are no plans to pause any payments starting Oct. 1,” according to the Social Security Administration postdated Sept. 19.

The Social Security Administration states that it will continue to issue paper checks when a beneficiary has no other means to receive payment.

Temporary checks are no longer available for initial claims, according to the Social Security Administration, and anyone seeking an exemption must file a waiver with the U.S. Treasury by calling 877-874-6347.

Details on how to enroll in direct deposit or obtain a Direct Express card are at www.ssa.gov/deposit/ — including various ways to make a shift to electronic payments.

It is also possible to enroll by phone by calling Treasury’s electronic payment solution center at 800-333-1795.

If you prefer enrolling in person, the Social Security blog suggests that you visit your financial institution.

In the rare cases where a beneficiary has no other means to receive payment, a beneficiary can call Treasury at 855-290-1545 to request a waiver to keep receiving a paper check.

It’s possible to request a waiver and still receive federal benefits by check if you were born on or before May 1, 1921; are unable to manage a bank account due to mental impairment or live in a remote location that lacks the “infrastructure to support electronic financial transactions.”

The Department of Treasury’s Bureau of Fiscal Service also has information online for what steps to take if you’re still receiving a paper check. One option: Enroll at GoDirect.gov.

Or call the electronic payment solution center at 800-967-6857, weekdays from 9 a.m. to 7 p.m.

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What should you expect for tax refunds?

When it comes to taxes, many people have received their tax refunds already if they filed their 2024 income tax returns by the April 15 deadline.

But others filed for a six-month automatic extension, which means they’re going to be running up against an Oct. 15 deadline to file a return. Many will owe money; others will be due a refund.

On Sept. 23, the IRS stated that “paper tax refund checks for individual taxpayers will be phased out beginning on Sept. 30.”

Most refunds will be delivered by direct deposit or other secure electronic methods, the IRS said.

If someone doesn’t have a bank account, they’re told to turn to prepaid debit cards or digital wallets. The IRS said limited exceptions will be available.

Yet, the IRS released only a few details explaining what it calls “the first step of the broader transition to electronic payments.”

The IRS said it will publish more detailed guidance relating to the filing of 2025 tax returns before the 2026 filing season begins.

“Until further notice, taxpayers should continue using existing forms and procedures, including those filing their 2024 returns on extension of a due date prior to Dec. 31, 2025,” the IRS stated in its news release.

The IRS said filing stays the same for now: “Taxpayers should continue to file their returns as they normally would, using one of the existing filing options.”

More to know: The IRS pointed out that the effort to move away from checks also applies to payments that the IRS receives for taxes owed to the federal government. Yet that isn’t being restricted now.

“Taxpayers should continue to use existing payment options until further notice,” the IRS stated Sept. 23.

Again, the IRS said, more guidance and information for filing 2025 taxes will be issued prior to the 2026 filing season.

Many people already use direct deposit. But plenty of people still request a paper check for their federal income tax refunds.

Internal Revenue Service data indicates that the agency issued more than 93.5 million tax refunds through May 9. Of that amount, 86.9 million refunds involved direct deposit. That would leave about 6.6 million tax filers receiving refunds via paper check.

“Only 7% of individual refund recipients received their refunds by check through the mail,” the IRS stated.

While only a small percentage of people receive their tax refunds by check, we’re still talking about millions of people.

Tax law experts note that those who could struggle with the shift away from paper checks to direct deposit include taxpayers without bank accounts and those who are elderly, disabled and living in rural areas with limited access to broadband.

“Transitioning more taxpayers to safe and accessible electronic payment options is a sound tax administration goal in the long run,” according to New York University’s Tax Law Center blog.

But, according to the blog, the goal will be impossible to achieve for the IRS by Sept. 30.

“Changing the way that millions of taxpayers receive their refunds could cause wide-scale confusion,” wrote Kathleen Bryant, a policy adviser at the Tax Law Center at NYU Law, a public interest tax law organization.

NYU’s Bryant noted that the IRS still needs to process many returns for tax year 2024 and prior-year returns from taxpayers who did not provide direct deposit information and requested their refunds via paper check.

“Some taxpayers who filed their tax year 2024 returns on time or filed in previous years are still waiting for refunds because their return is stuck in various stages of submission processing, exams, appeals, or litigation,” the blog stated.

“The IRS has a legal obligation to ensure that these taxpayers are issued the refunds they are owed, even if it is ultimately necessary to send them a paper check,” Bryant wrote.

Bryant told the Detroit Free Press the IRS has an obligation to provide “meaningful exceptions to the paper checks policy and should ensure that any new electronic payment options are easily accessible, secure, and reliable for all taxpayers.”

The IRS noted in its Sept. 23 release that said taxpayers who normally receive a refund by check should take steps now to receive that money by direct deposit.

Taxpayers also can consider opening a free or low-cost account. The IRS recommends going to FDIC: GetBanked and MyCreditUnion.gov for account options.

For Michigan taxpayers, it is important to note that the Michigan Department of Treasury has not made any changes on issuing paper checks for income tax refunds.

If you face an Oct. 15 tax deadline after requesting a six-month automatic extension, it’s best to opt for direct deposit of any potential federal income tax refund, according to Carl Breedlove, lead tax research analyst at The Tax Institute at H&R Block.

He noted that direct deposit can be sent to checking, savings, retirement or IRA accounts. And tax filers have the ability to split their refund cash in up to three different accounts.

Tax filers also can use prepaid debit cards and some mobile payment apps that accept direct deposits.

Direct deposit is the fastest way to receive an income tax refund. If you e-file your income tax return and provide accurate information for direct deposit, it is expected to take up to 21 days to get your refund, assuming that there are no issues or concerns with the return.

By contrast, the IRS notes that it may take six weeks or longer for refunds sent by mail if you do not e-file.

What if you’ve already filed a 2024 tax return and are waiting for a refund?

Breedlove said that the IRS is expected to process the refund based on the information provided on the return, including the taxpayer’s selected refund method.

A tax filer cannot generally change the refund method for that tax year, he said.

The IRS “Where’s My Refund?” tool or the IRS2Go mobile app offer ways to track a refund. If a refund is lost or not received, the taxpayer can initiate a refund trace with the IRS. The IRS notes online that a tax filer should only call the IRS about a refund’s status if the “Where’s My Refund?” tool recommends that the individual call the IRS.

Contact personal finance columnist Susan Tompor: stompor@freepress.com. Follow her on X @tompor.

This article originally appeared on Detroit Free Press: Paper checks will go away for Social Security, tax refunds