Tax refunds for millions of Americans may slow in 2026 due to recent changes in regulations and policies related to the annual tax filing process.
U.S. Internal Revenue Service (IRS)’s planned phase-out of paper checks is one major development that could halt refunds and delay them for weeks.
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What has changed?
Refunds are now processed via direct deposit by default. This is the IRS and the U.S. Ministry of Finance Modernizing federal payments.
As the IRS phases out paper checks, taxpayers who fail to provide bank account and routing information when filing will no longer automatically receive refunds.
Instead, the IRS will hold refunds until bank details are provided. In previous years, the agency would automatically issue paper checks in such cases. This change will affect personal income tax return Applications submitted for the 2025 tax year will be processed in 2026.
According to the official IRS website, when a refund is blocked, the IRS issues a CP53E notice explaining the situation and allowing taxpayers 30 days to submit accurate bank information online through their IRS account.
If the filer does not respond within the 30-day period, the IRS will only issue a paper check approximately six weeks after the notification date.
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How to avoid this delay?
To help prevent refund freezes, the IRS recommends taxpayers follow these steps:
- Activate direct deposit to your bank account by providing your bank account and routing number before submitting your application.
- File electronically as early as possible to speed up processing and reduce errors.
- After filing your tax return for a CP53E notice, keep a close eye on your IRS account.
- If you receive a CP53E notification, respond immediately to avoid further delays that could drag on for weeks.
