Millions of Americans may experience slower tax refunds in 2026 due to the recent change in regulations and policies pertaining to the yearly tax filing process.
The Internal Revenue Service’s (IRS) plan to phase out paper checks is one of those significant developments, which could cause refunds to be stopped and postponed for weeks.
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What has changed?
Refunds will now be processed by direct deposit by default. This comes as the IRS and U.S. Treasury Department modernize federal payments.
Due to the IRS’s phase-out of paper checks, taxpayers who fail to include their bank account and routing information when filing will no longer be automatically refunded.
Instead, the IRS will pause refunds until banking details are provided. In previous years, a paper check would be automatically issued by the agency in such cases. This change will affect individual income tax returns filed for the 2025 tax year, which are being processed in 2026.
According to the official site of the IRS, A CP53E notice, which the IRS sends out when a refund is frozen, explains the situation and allows taxpayers 30 days to submit accurate bank information online through their IRS account.
The IRS will only issue a paper check approximately six weeks following the notice date if filers do not reply within that 30-day window.
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How to avoid this delay?
To help prevent these refund freezes, here are the steps that the IRS suggests taxpayers should follow:
- Activate direct deposit for your bank account by providing your bank account and routing numbers before filing.
- File early and electronically to speed up processing and reduce errors.
- Keep an active eye on your IRS account after you have filed your tax return for the CP53E notice.
- If you receive a CP53E notice, reply immediately to avoid any further delay that could drag on for multiple weeks.