If you live outside the United States and expect a tax refund, you may no longer receive it- unless you act now.
Starting September 30, 2025, the IRS will no longer issue or accept paper checks. For U.S. citizens living abroad, this is not a minor administrative change—it’s a significant shift in how you receive refunds, Social Security payments, and pay any tax you owe.
This move, based on Executive Order 14247, requires all federal payments to be made electronically. While that may seem efficient, many U.S. expats do not have access to a U.S. bank account or are unaware that foreign bank accounts are not eligible for IRS direct deposit.
What’s Changing for Americans Expats overseas?
From Fall 2025:
IRS refunds will only be issued by direct deposit to a U.S. bank account
Social Security checks will no longer be mailed
The IRS will no longer accept paper checks as payment
The IRS will not deposit refunds into:
Non-U.S. bank accounts
Foreign accounts in U.S. dollars
Digital wallets or online-only accounts based outside the U.S.
If you file a U.S. tax return and expect a refund, you must include a valid U.S. bank account number and routing number on your Form 1040. If not, your refund will be delayed- or may not be issued at all.
Why This Matters for U.S. Expats
Many Americans living abroad:
Have closed their U.S. financial accounts
Cannot easily open a new U.S. bank account due to FATCA and residency requirements
Depend on refund checks to offset foreign taxes or filing fees
If you don’t update your IRS refund method, you may lose access to those funds.
Your options are limited but actionable:
Open or maintain a U.S.-based bank account that accepts ACH deposits
Use a U.S. dollar account with a bank that supports U.S. routing and account numbers
In rare cases, apply for an exception, though approval is difficult
If you owe taxes, the IRS already requires electronic payments through:
Third-party debit or credit card processors
Is This Permanent?
This policy was introduced by executive order, not legislation. Technically, a future administration could reverse it—but the federal agencies involved are already moving forward with implementation. The U.S. Treasury and the IRS are phasing out paper-based payments across the board.
Expats should not count on this change being undone.
What Should Expats Do Now?
If you are a U.S. citizen or Green Card holder living abroad:
Secure a U.S. bank account that supports direct deposits
Review and update your IRS filing details to include the correct routing and account number
Check your Social Security payment method, if applicable
Stay informed as the IRS releases further guidance
Failure to act now could result in:
Missing your refund
Inability to pay your taxes
Delays or penalties
Increased stress and confusion during tax season
This Policy Affects All American Expats
Whether you are a contractor in the UAE, a student in the UK, or a dual citizen in the Netherlands, you are still a U.S. taxpayer. If you expect a refund or receive benefits from the U.S. government, this policy change directly affects you.
Most Americans overseas are unaware that paper checks will no longer be sent. Don’t wait until tax season to find out you cannot receive what you’re owed.
Need Help?
At Expats Overseas, we specialize in helping Americans abroad understand and adapt to changes in U.S. tax law and compliance.
If you’re unsure how to update your refund method or secure a compliant U.S. bank account, contact us. We are here to help you prepare for 2025 and beyond.
Expats Overseas
Navigating U.S. tax obligations as an American expatriate in Portugal can feel overwhelming—but you don’t have to do it alone. Expats Overseas is your trusted partner for U.S. expat tax filing. We help you stay compliant with IRS rules while also coordinating with local tax systems like Portugal’s, so you avoid double taxation and costly mistakes.
Whether you’re filing for the first time abroad or catching up after years of missed returns, our expert team simplifies the process and ensures you’re claiming the deductions and exclusions you’re entitled to—like the Foreign Earned Income Exclusion or Foreign Tax Credit.
Make your expat life easier. Contact Expats Overseas today to get started with a secure, stress-free U.S. tax return.
