Nearly One in Three Gen Z Adults Report Not Filing Taxes as Digital Divide Widens Across Generations, ACI Worldwide Survey Finds

WHY THIS MATTERS: The ACI Speedpay report is a vital stress test of the US consumer’s current financial reality, revealing a payments landscape shaped less by preference and more by necessity. The overwhelming redirection of tax refunds towards savings and debt signals persistent economic strain, turning the refund cycle into a critical moment for financial survival rather than discretionary spending. For the fintech and digital payments industry, these findings highlight two critical opportunities. First, the growing reliance on electronic funds withdrawal and direct deposit accelerates the demand for instant payments solutions, forcing governments and legacy systems to reduce settlement times for refunds. Second, the striking difference in fraud awareness and filing behavior among Gen Z underscores a severe gap in financial inclusion. Payment providers and tax platforms must evolve beyond simple transaction processing to offer tools that actively build financial literacy, guiding the next generation into the formal financial system safely and effectively. This data confirms that digital adoption is nearly complete; the next phase is improving the quality and security of the digital interaction.

ACI Worldwide (NASDAQ: ACIW), an original innovator in global payments technology, released its third annual ACI Speedpay Tax Payment Trends report, a nationally representative survey of 1,198 US adults conducted in partnership with YouGov. Nearly one in three Gen Z adults (30%) say they do not file a federal tax return, and another 30% are unsure whether they will file at all. While digital tax filing and payments are now the default for most Americans, how people file, pay, and think about fraud still vary sharply by generation.

Key findings:

• 30% of Gen Z say they do not file taxes, with another 30% unsure whether they will file
• 44% of Americans plan to save their refund; 37% will use it to pay down debt
• Security concerns rise with age, with younger demographics underestimating fraud risk.
• 64% would switch to debit to avoid higher credit card transaction fees
• Paper filing has dropped to just 5% of taxpayers, a record low

The data show financial pressure across all age groups. 44% of taxpayers plan to deposit their refund directly into savings, making it the most common use for the third year in a row. Another 37% plan to use their refund to pay down debt. Only 8% plan to use the money for a vacation. For Gen X, refunds are overwhelmingly practical: 43% will direct theirs toward debt and 88% expect to receive their refund via direct deposit, the highest rate of any generation in the study.

“Tax refunds are no longer spending money. They are financial survival,” said Ron Shultz, EVP and General Manager of ACI Speedpay at ACI Worldwide. Consumers want faster access to funds, full transparency on what it costs to pay their taxes, and real confidence that their information is protected. That expectation is now the baseline.”

Younger Americans show the least concern for tax scams

The report shows that concern about fraud differs sharply by age. Boomers show the greatest concern about identity theft at 51%, followed by Gen X at 49%. Gen Z and Millennials were the most likely to report no concern about any fraud category. The generation least likely to file taxes is also the least concerned about fraud, highlighting a growing gap between risk and awareness among younger Americans.

Debit dominates by choice, credit wins by necessity

When asked if they would switch from credit to debit to avoid a higher transaction fee, 64% of respondents said yes. Gen X led at 71%, followed by Gen Z at 68% and Millennials at 65%. Only 15% said they would continue using credit regardless of cost.

While taxpayers prefer debit to avoid higher fees, ACI’s data shows a divergence between intent and reality: debit and credit split transaction volumes evenly, but credit accounts for 80% of total spend. Debit signals a desire for control and cost efficiency, yet as payment amounts rise, credit becomes the default, not by choice, but for the flexibility it provides under increasing financial pressure.

Paper filing hits record low

Paper tax filing fell to 5% in the 2026 survey, down from 11% in 2025 and 10% in 2024. Meanwhile, 42% of taxpayers now file electronically through popular software platforms, up from 39% last year. Millennials lead software adoption at 53%. Electronic funds withdrawal is now the top overall payment method at 29%, up from 25% in 2024. Debit card payments account for 20%, with Gen Z leading all generations in debit usage at 25%. Direct deposit is the preferred refund method for 80% of respondents overall and check preference among Gen Z dropped from 24% in 2025 to 14% in 2026.

“Generation is now the strongest predictor of tax payment behavior,” said Shultz. “A Gen Z taxpayer who isn’t sure they need to file has a completely different relationship with the system than a Boomer worried about identity theft. That gap is widening.”

The full 2026 ACI Speedpay Tax Payment Trends report is available at aciworldwide.com.

FF NEWS TAKE: This data moves the needle by proving that generational behavior is the primary segmentation variable in tax and payment infrastructure. The preference for debit over credit, despite credit’s dominance in volume, is a clear signal to providers to aggressively lower transaction fees and integrate more cost-efficient rails like ACH or RTP. We anticipate that pressure for embedded finance solutions within tax software will intensify, allowing consumers to immediately allocate refunds to savings or debt products. The industry must urgently address the Gen Z vulnerability to fraud before widespread adoption of digital tools creates a systemic risk.