IRS Going Digital: What It Means for Your R&D Tax Credit Refunds

Paper Payments Will Be A Thing Of The Past

By September 30, 2025, the IRS will stop sending paper checks for tax refunds, including refunds tied to the R&D Tax Credit. The directive comes straight from an Executive Order signed by President Trump, mandating that all federal payments shift to electronic methods like direct deposit, digital wallets, and real-time bank transfers.

For businesses using the traditional paper check method for refund, this shift isn’t optional. Once the deadline passes, paper checks are out—regardless of whether your business has set up an EFT account with the IRS or not.

Why The IRS is Going All-In on Digital

The motivation behind this transition extends beyond mere technological advancement. Government analysis reveals stark vulnerabilities in the current paper-based system:

• Financial burden: Maintaining physical infrastructure and specialized technology for processing paper records cost American taxpayers over $657 million in fiscal year 2024 alone.
• Security vulnerabilities: Treasury checks are approximately 16 times more likely to be reported lost, stolen, undeliverable, or altered than electronic transfers.
• Rising fraud concerns: Check fraud has nearly doubled in recent years, with banks reporting approximately 680,000 instances in 2022.
• Mail theft escalation: Complaints regarding stolen mail have increased substantially since 2020, creating additional risks for paper-based refunds.

“The government needs to catch up with the technology revolution,” President Trump noted in announcing the initiative. For companies already leveraging digital tools and tax technology in their operations, this shift represents a welcome alignment with modern business practices—enhancing both security and efficiency in accessing critical R&D funding.

What R&D Credit Recipients Need to Know

The mandate creates several concrete implications for companies claiming R&D incentives:

• September 2025 marks the complete end of paper refund checks
• Missing banking registration with the IRS will halt access to R&D funding
• Digital filing plus direct deposit can shorten refund timelines by months
• Enhanced security measures protect sensitive financial data throughout the process

“Companies receiving R&D funding need banking information registered with the IRS before the deadline,” advises Silvia Martinez, Senior Manager Client Delivery at Boast. Businesses with innovation cycles dependent on predictable funding must prepare for this digital shift.

Acceleration represents the most compelling advantage. Electronic transfers typically reach companies within 21 days of e-filing—dramatically faster than paper checks. When R&D timelines depend on capital availability, this speed advantage creates meaningful competitive benefits.

What This Means for Innovative Businesses

For those getting refunded by cheque—especially startups or subsidiaries without existing EFT setups—this shift can disrupt timelines.

Without a valid bank account on file with the IRS, businesses risk missing out or facing extended delays. The order gives clear instructions: the IRS will not issue paper disbursements after the deadline unless rare exceptions apply (national security, certain law enforcement payments, or individuals without banking access).

What Your Business Needs To Do

Here’s what to check:

• Confirm your business has a valid U.S.-based bank account connected to the IRS
• Ensure all routing and account numbers are up to date on recent filings
• Review how your refund is processed—especially if you’ve filed amended returns

The IRS won’t automatically enroll you. If you’re unsure whether your banking details are already linked to your entity, now’s the time to find out. Even small errors can result in missing funds or costly delays.

How to Get Your Business Ready

To prepare for this mandatory transition, Boast. recommends the following actions for all U.S. clients:

• Set up or access your IRS Online Account to verify your business information and banking details
• Add your routing and account numbers to your IRS profile (you can split refunds across up to three accounts)
• Consider using a business banking app or debit card with deposit routing information if you’re operating with personal or intermediary accounts
• Familiarize yourself with IRS-approved payment tools like IRS Direct Pay, EFTPS, and the IRS2Go mobile app

For companies without traditional banking relationships, numerous digital alternatives provide routing and account numbers compatible with IRS direct deposit service. Visit the IRS Page linked here to learn more and to update your information.

This payment modernization coincides with significant changes to R&D tax credit documentation requirements—most notably, comprehensive updates to Form 6765. Section G (becoming mandatory in 2025) requires detailed breakdowns at the business component level, raising the standards for supporting documentation.

This dual transformation creates strategic challenges for R&D-focused companies:

• Documentation standards now demand greater precision as payment methods modernize
• Companies face pressure to update both financial processes and technical substantiation practices
• The January 2026 extended “perfecting period” offers limited time to correct deficiencies

“The new rules raise the bar—get your banking and your documentation in order now,” advises Asley Crawford, Director of R&D Customer Delivery at Boast.

Additionally, the IRS has extended the “perfecting” period for R&D credit claims through January 10, 2026, providing a 45-day window to address deficiencies identified in submitted claims. This creates a critical timeline for companies to implement both banking and documentation improvements simultaneously.

How Boast Can Support Your Transition

Boast Has Your Back

At Boast, we’re here to make sure you’re not facing this transition alone. As the IRS moves toward a fully digital refund process, our role is to keep you informed, supported, and confident every step of the way.

Whether you’re reviewing your banking setup, filing a new claim, or simply navigating what these updates mean for your R&D tax credit, we’re ready to help clarify the path forward.

“The switch to digital is a great step—but only if you’re ready,” emphasizes Silvia Martinez, Senior Manager Client Delivery at Boast.

We’ll continue to monitor these federal changes and provide insights to help your business adapt without disruption. While we can’t make changes on your behalf, we’re always available to answer questions and point you to the right resources.

For step-by-step instructions on setting up direct deposit with the IRS, visit:
Get Your Refund Faster – IRS Direct Deposit Guide

Have questions about how this affects your next claim? Connect with our team—we’re here to help you stay ahead.