IRS Paper Refund Delays Nearly Tripled in 2026: What Taxpayers Should Know
The 2026 tax filing season brought longer waits for many taxpayers who relied on paper returns or paper refund checks.
According to a recent Government Accountability Office report, paper-filed individual income tax returns took an average of 30 days to process in 2026, compared with 16 days in 2025. At the same time, the IRS continued shifting taxpayers toward electronic filing, direct deposit, and online self-service.
For individuals and businesses, the takeaway is increasingly clear: how you file and how you choose to receive your refund can significantly affect how quickly your tax matters are processed.
Paper Tax Returns Took Much Longer to Process
The IRS processed approximately 98% of the 177 million individual and business returns it received during the 2026 filing season, with about 95% filed electronically.
Paper returns, however, experienced significant delays.
The average processing time for a paper-filed individual income tax return increased to 30 days, compared with 16 days in 2025 and well above the IRS goal of 13 days.
Business payroll tax returns took even longer, averaging approximately 72 days, compared with the IRS policy goal of 32 days.
Staffing and System Issues Contributed to Delays
The GAO pointed to staffing shortages and technology problems as major contributors to slower processing.
The IRS Submission Processing unit ended the filing season with approximately 18% fewer employees than the previous year.
Technology challenges also affected operations. The system used to process individual paper returns was unable to handle 2025 tax-year returns during the first six weeks of the filing season. Meanwhile, the scanning system for business paper returns was unavailable for the entire season.
To help manage the workload, the IRS sent approximately 3.7 million business paper returns to outside scanning vendors, a 725% increase from the previous year.
Paper Refund Checks Are Becoming Less Common
The IRS is also continuing its shift toward electronic payments.
During the 2026 filing season, the number of paper refund checks issued fell by more than 80%, dropping to approximately 493,000.
At the same time, the average time to issue a paper refund check increased from 13 days in 2025 to approximately 36 days in 2026.
Beginning in January 2026, taxpayers who did not provide direct deposit information could receive an IRS notice requesting bank account details before their refund was issued.
Approximately 4.2 million taxpayers received these notices.
Direct deposit refunds moved significantly faster. According to the GAO, nine out of 10 direct deposit refunds were issued within 21 days.
Refund Amounts Increased in 2026
Despite the processing delays, taxpayers received more money in refunds overall.
By the end of the 2026 filing season, the IRS had issued approximately $296 billion in refunds, an increase of $43 billion, or 17%, compared with 2025.
The average refund also increased by approximately 11% to $3,275.
The IRS attributed part of the increase to new deductions for qualified tips and overtime pay.
Reaching the IRS Took Longer
Taxpayers seeking help by phone also faced longer wait times.
The average wait to reach an IRS representative increased from approximately three minutes in 2025 to eight minutes in 2026.
More taxpayers turned to online tools instead. Individual IRS online account logins reached approximately 155 million, while visits to the “Where’s My Refund?” tool increased 9% to approximately 346 million.
In-person service also declined. IRS Taxpayer Assistance Centers served approximately 626,000 taxpayers during the filing season, 16% fewer than the previous year.
What Taxpayers Can Do to Avoid Delays
The 2026 filing season highlights several practical steps taxpayers can take to reduce unnecessary processing delays:
File electronically whenever possible. Electronic returns generally move through IRS systems faster than paper filings.
Choose direct deposit for refunds. Paper checks are becoming less common and can take significantly longer to arrive.
Double-check your return before filing. Missing information and errors can cause additional delays.
Keep your banking information accurate. Incorrect direct deposit information may interrupt refund processing.
Use IRS online tools. Online accounts and refund-tracking tools can help taxpayers monitor their returns without waiting on the phone.
File early when possible. Filing ahead of major deadlines provides more time to address unexpected issues.
What Business Owners Should Know
The 72-day average processing time for paper payroll tax returns is especially important for businesses.
Delays involving payroll filings, amended returns, elections, tax notices, and other documents can create additional administrative challenges.
Businesses that continue to rely on paper filing should review whether electronic filing options are available and make sure important tax documents are complete and accurate before submission.
Plan Ahead for the Next Tax Season
The IRS continues moving toward a more digital tax system, and the difference between electronic and paper processing is becoming increasingly significant.
Taxpayers and business owners who prepare early, maintain accurate records, file electronically, and choose direct deposit may be better positioned to avoid unnecessary delays.
Have questions about tax filing, business tax compliance, estimated payments, or planning for the next tax season?
Virtual CPAs can help you stay organized, compliant, and prepared.
This article is for general informational purposes only and should not be considered tax, accounting, or legal advice. Tax rules and individual circumstances vary. Consult a qualified tax professional regarding your specific situation.