Friday, April 10, 2026

Pasadena Taxpayers Encounter New Refund Rules — and Eaton Fire Survivors Get a Break

Rep. Judy Chu’s pre-deadline advisory explains how the switch to electronic refunds may delay some payments, and why wildfire relief money received in 2025 is generally tax-free

If you filed your 2025 federal tax return without including bank account information, your refund may already be frozen — and the clock is ticking.

Pasadena Congresswoman Judy Chu is alerting constituents this week that the 2026 filing season marks the first year in which the federal government is delivering most tax refunds electronically, not by paper check. Taxpayers who did not provide direct deposit information when they filed will receive an IRS notice — called CP53E — giving them 30 days to supply banking details through their IRS online account. Those who don’t act in time will wait an additional six weeks for a paper check, according to Chu’s advisory. Tax Day is April 15.

Chu, who represents the 28th Congressional District including Pasadena, issued the guidance as part of pre-deadline outreach to her constituents. She serves on the House Ways and Means Committee, which has jurisdiction over tax and revenue legislation.

The shift stems from Executive Order 14247, which President Trump signed on March 25, 2025, directing the Treasury Department to phase out paper checks for federal payments. The Treasury began that phase-out on September 30, 2025. The order does not change how taxes are filed — only how refunds are delivered and payments processed. For now, the IRS continues to accept checks and money orders, and limited exceptions exist for taxpayers who cannot receive electronic payments due to hardship or other circumstances.

Banking information can only be updated through the IRS’s online portal in response to a CP53E notice; IRS employees cannot make the change by phone or in person. Taxpayers receive only one opportunity to update the information.

For Eaton Fire survivors, the advisory brings a significant piece of good news. Wildfire relief payments received in 2025 to compensate for losses, expenses, or damages are generally not subject to federal income tax — as long as those amounts were not also covered by insurance or other reimbursement, according to Chu’s office and IRS guidance. The exclusion applies to payments received between January 1, 2020, and December 31, 2025, for any forest or range fire declared a federal disaster in 2015 or later. The January 2025 Eaton Fire, which devastated Altadena, qualifies as a federally declared disaster.

Chu’s advisory also points constituents to free tax filing resources as the deadline approaches. IRS Free File — available at irs.gov/freefile — offers guided tax software at no cost to taxpayers whose 2025 adjusted gross income was $89,000 or less. The program is available in Spanish, and eight providers are participating this year. For those who need in-person help, the IRS’s Volunteer Income Tax Assistance (VITA) and Tax Counseling for the Elderly (TCE) programs offer free preparation to people who generally made $69,000 or less, persons with disabilities, and limited English-speaking taxpayers, according to Chu’s office. The TCE program, which specializes in retirement and pension issues, is particularly designed for those 60 and older.

To find a nearby VITA or TCE site: Use the locator tool at irs.gov or call 800-906-9887. For questions about Eaton Fire wildfire relief tax guidance, visit irs.gov/newsroom/wildfire-relief-payments-and-casualty-losses-frequently-asked-questions. For federal agency assistance, Rep. Chu’s Pasadena office can be reached at 626-304-0110 or at chu.house.gov.

Thousands of Altadena families spent 2025 picking through the ruins of their neighborhood. The federal government is telling them, at least for tax purposes, that the money they received to rebuild is theirs to keep.