As you put together for the upcoming tax season, a notable change is taking impact that can affect how your purchasers obtain their tax refunds. Efficient September 30, 2025, the IRS is phasing out paper tax refund checks for particular person taxpayers as a part of a broader authorities transition to digital funds.

Whereas 93% of taxpayers already obtain refunds by way of direct deposit, this transformation requires proactive planning – particularly for speaking with the 7% of purchasers who nonetheless depend on paper checks.

This weblog will show you how to perceive the implications in your follow, the updates in Thomson Reuters UltraTax CS software program, and the motion steps it’s worthwhile to take now to make sure a easy submitting season.

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Understanding the change with paper test tax refunds

Why this transformation advantages your purchasers

The scope: Understanding the numbers on tax refunds

What’s modified in UltraTax CS

Motion steps for tax professionals for tax season

What about funds to the IRS?

Trying forward: Future updates on the paper test phaseout

Put together your accounting agency now for a seamless transition

Understanding the change with paper test tax refunds

President Trump’s Govt Order 14247, “Modernizing Funds to and from America’s Financial institution Account,” eliminates the U.S. authorities’s follow of issuing paper checks, together with tax refunds.

The IRS introduced implementation particulars in IR-2025-94 on September 23, 2025, marking step one on this broader transition to digital funds. Whereas this can be a federal mandate, it isn’t clear if state companies will comply with swimsuit.

Why this transformation advantages your purchasers

In accordance with the IRS, this transition affords three crucial advantages you can share with involved purchasers:

• • Enhanced safety: Paper checks are over 16 instances extra prone to be misplaced, stolen, altered, or delayed than digital funds. Direct deposit additionally eliminates the chance of checks being returned as undeliverable.
  • Sooner refunds: Digital refunds are issued in lower than 21 days (about 3 weeks) for e-filed returns with direct deposit and no points, in comparison with 6 weeks (about 1 and a half months) or longer for paper checks mailed to taxpayers.
  • Price effectivity: Digital funds are considerably extra environment friendly and value much less to course of than paper checks.

The scope: Understanding the numbers on tax refunds

In the course of the 2025 submitting season, the IRS issued greater than 93.5 million particular person tax refunds—and 93% of these (virtually 87 million) had been already delivered by way of direct deposit. This alteration primarily impacts the remaining 7% of taxpayers who nonetheless obtain paper checks.

Whereas 7% could sound small, relying in your shopper base, this might signify a substantial variety of purchasers who want schooling and help with the transition.

What’s modified in UltraTax CS

To align with the manager order, Thomson Reuters has applied a number of updates in your UltraTax CS software program. Let’s unpack these adjustments.

Banking display screen updates

Display Financial institution now not has the choice to allocate a refund to a paper test. Type 8888, Allocation of Refund, can now solely be used to allocate a direct deposit of refund to completely different financial institution accounts.

Shopper paperwork now not obtainable for proforma

Because of the govt order, a number of 2024 client-facing paperwork won’t be obtainable for proforma in 2025. These paperwork are targeted on fee strategies which can be now not supported. UltraTax CS shopper paperwork shall be up to date in a future launch to concentrate on supported digital fee and refund alternate options primarily based on IRS steerage for 2025 tax returns.

The affected paperwork embody:

• Return directions:
  • • 1040 Return Directions
    • 1040 Estimate Directions
    • 1040 Extension Directions
    • 1040 Amended Directions
    • Federal Directions Insert
    • Extension Directions Insert
    • Amended Directions Insert
• Customized paragraphs:
  • • 1040ES Digital Funds (FI)
    • Credit score Card Fee (FI)
    • Estimates Credit score Card Fee (FI)
    • Extension Credit score Card Fee (FI)
    • IRS Direct Deposit Restrict (FI)
    • Joint Tax Refunds (FI)
• Type-specific directions:
  • • Kinds 656, 1045, 1310, 8689, 8697, 8404, and 9465 Directions

Motion steps for tax professionals for tax season

To make sure a easy transition in your purchasers, begin making ready now. These 5 steps will show you how to establish affected taxpayers, replace banking particulars, and talk the advantages of digital refunds successfully.

1. Determine affected purchasers now

Evaluate your shopper base to establish the roughly 7% who historically obtain paper checks. These purchasers want rapid outreach earlier than submitting season begins. Early communication prevents refund delays and reduces last-minute panic calls. You need to use the 2024 UltraTax Knowledge Mining Utility to assist establish purchasers that obtained refunds by way of paper checks.

2. Begin shopper conversations early

Attain out to affected purchasers nicely earlier than submitting season. They should:

• • Present legitimate checking account info for direct deposit
  • Perceive their choices if they don’t have a checking account
  • Know that that is an IRS requirement, not a agency coverage change

3. Assist unbanked purchasers discover options

For purchasers with out financial institution accounts, the IRS is offering alternate options together with:

• • Pay as you go debit playing cards
  • Digital wallets
  • Restricted exceptions (particulars forthcoming from the IRS)

Direct purchasers to assets for opening free or low-cost accounts:

4. Confirm and replace banking info

Now’s the time to:

• • Evaluate and replace all shopper banking info in UltraTax
  • Affirm account and routing numbers are correct
  • Double-check that info is full (some purchasers could have solely supplied partial info in prior years)
  • Guarantee purchasers perceive the significance of offering appropriate info to keep away from refund delays or returned deposits

Present your purchasers the Financial institution Account Verification kind obtainable in UltraTax CS and Shopper Organizer, the place they’ll confirm the checking account info that supplied you beforehand remains to be correct. Alternatively, you possibly can electronic mail or mail the Knowledge Mining Letter referred to as Financial institution Account Verification or Financial institution Account Verification – Subsequent Yr.

5. Educate purchasers on the advantages

Assist purchasers perceive this isn’t only a authorities mandate—it’s an enchancment to their refund course of:

• • Their refunds will arrive considerably sooner
  • Their cash is far more safe
  • They keep away from the chance of misplaced or stolen checks
  • No extra journeys to the financial institution to deposit checks
  • No issues about checks being delayed within the mail

What about funds to the IRS?

The manager order additionally applies to funds made to the IRS, however taxpayers ought to proceed utilizing current fee choices till additional discover. The IRS will challenge further steerage for submitting 2025 taxes previous to the 2026 submitting season.

Trying forward: Future updates on the paper test phaseout

Thomson Reuters is actively monitoring IRS steerage on this transition and can proceed updating UltraTax CS as extra info turns into obtainable. Look ahead to future software program updates that can embody:

• • Revised shopper paperwork targeted on digital fee choices
  • Further steerage on different refund strategies
  • Updates primarily based on last IRS implementation particulars

Put together your accounting agency now for a seamless transition

Whereas lots of your purchasers already use direct deposit, this transformation requires proactive communication with those that don’t. The important thing to a easy transition is beginning these conversations now—earlier than the submitting season rush begins.

By figuring out affected purchasers, serving to them arrange direct deposit or different refund strategies, and educating them on the advantages, you’ll forestall refund delays and scale back shopper anxiousness.

Take motion immediately: 

• • Evaluate your shopper checklist to establish those that obtained paper checks in 2025
  • Replace your shopper communication templates to handle this transformation
  • Confirm banking info is full and correct in UltraTax
  • Put together workers to reply questions concerning the transition

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