Direct Deposit Changes for 2026: How They Could Affect Your Tax Refund

You may have seen that the IRS is moving away from paper checks. If you usually receive your tax refund by paper check, important changes are coming in 2026 that could impact how—and when—you get your money.

The IRS is continuing its push toward fully digital payments, and that means new rules for taxpayers who don’t use direct deposit or whose bank information is incorrect. Without the right setup, your refund could be delayed.

The good news is that if you are a client of Trueblaze and you’re expecting a refund with your 2025 tax return, we’re already on top of this for you—making sure your bank information is entered correctly to help avoid unnecessary delays.

New Rules for Refunds in 2026

Starting with 2025 tax returns filed in 2026, the IRS will no longer automatically issue paper checks in certain situations. Instead, refunds may be temporarily frozen until you take action.

Returns filed without direct deposit information

• The IRS will still process individual income tax returns (Form 1040 series) filed without bank account information.
• However, the IRS will temporarily freeze the refund until the taxpayer provides direct deposit information or requests a paper check.

Rejected direct deposits

• The IRS will freeze most direct deposits that are rejected by the bank and will not automatically reissue them as paper checks.
• Some reject codes are excluded, but most rejected direct deposits will require taxpayer action.

Bottom line: Incorrect or missing banking details will now require action on your part—and could delay your refund.

Who is Not Affected?

Some taxpayers are exempt from these new rules, including:

• International taxpayers
• Minors
• Incarcerated individuals
• Taxpayers with religious objections
• Estates (decedent taxpayers)

What Happens If Your Refund Is Frozen?

If your refund is placed on hold, you’ll receive a CP53E notice from the IRS with instructions.

Here’s what to expect:

• You’ll be asked to update your direct deposit details through your IRS online account
• You generally have 30 days to respond
• If you take no action, the IRS will issue a paper check after about six weeks

Important: The IRS only sends this notice once. If your updated direct deposit fails again, you won’t get another opportunity to fix it before a check is issued.

How to Update Your Direct Deposit Information

The fastest way to resolve a frozen refund is through your IRS Online Account.

You can:

• Enter or correct your bank account and routing numbers
• Request direct deposit reissuance
• Apply for a paper check waiver if needed

If your updated information is verified successfully, your refund will be sent via direct deposit.

Need Help? Here Are Your Options

The CP53E notice includes a toll-free information-only phone line: 866-325-4066.

• This line provides recorded explanations of the notice and next steps.
• It does not transfer callers to a customer service representative or let you enter deposit information – it is for informational purposes only.

If you do not have a bank account or an online account, you will need to phone the main IRS phone number (800-829-1040) and request that the Customer Service Representative change your refund to a paper check.

Avoid Delays in Your Refund

To ensure you receive your refund as quickly as possible:

• Double-check your routing and account numbers before filing
• Use direct deposit whenever possible
• Set up your IRS Online Account in advance
• Respond quickly to any IRS notices

Taking these steps can help you avoid unnecessary delays and complications.

Next Steps

The IRS’s move toward digital payments is designed to improve efficiency—but it also means taxpayers need to be more proactive. Planning ahead and verifying your information can make all the difference. If you want help choosing the best refund method—or aligning your tax refund with your cash flow, estimated payments, or business strategy—contact TrueBlaze today.