TRANSFER TO ELECTRONIC PAYMENTS

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December 2025 – Important Change – Federal Government to Phase Out Paper Checks

 

OVERVIEW

A major federal payment change is underway that will directly impact many taxpayers. The Treasury Department has been directed to discontinue most paper checks and move to secure, electronic-only federal disbursements starting on September 30, 2025. As this transition takes effect, individuals who rely on paper checks for tax refunds or federal benefits will need to take action to avoid delays. We are continuing to monitor developments closely and are here to help you navigate this transition smoothly. 

WHAT’S CHANGING? 

On March 25, 2025, President Trump signed Executive Order 14247, titled “Modernizing Payments To and From America’s Bank Account”.

Starting September 30, 2025, the U.S. Treasury will cease issuing paper checks for most federal payments, including: 

  • Tax refunds
  • Benefit payments (ex. Social Security)
  • Vendor payments and intragovernmental payments

Federal agencies are required to transition to electronic funds transfer (EFT), such as: 

  • Direct deposit
  • Prepaid card accounts
  • Other digital payment options

There are limited exceptions: 

  • Individuals without access to banking or electronic payment systems
  • Certain emergency payments where EFT would cause “undue hardship”
  • Other Special Cases

WHAT IS THE REASON FOR THIS CHANGE?

According to the White House, paper-based payments impose unnecessary costs, delays, and risks (fraud, theft, lost checks)

The government estimates that Treasury checks are 16 times more likely to be lost, stolen, returned undeliverable, or altered than EFTs. 

Maintaining paper-checks infrastructure is expensive (over $657 million in 2024, per the executive order).

WHAT DOES THIS MEAN FOR YOU AND YOUR TAX REFUNDS?

If you currently receive refund checks by mail, after September 30, 2025, expect to receive refunds via electronic payment only.

No action is needed if you already receive your federal refunds by direct deposit or EFT. 

If you are still on paper check, now is the time to set up an EFT method: 

  • For benefits (Social Security, etc.): contact the issuing agency, or use the gov website.
  • For tax refunds: make sure your direct deposit information is correct on your tax return. We will be reaching out to you if we do not have direct deposit information on file.

DIGITIAL PAYMENT OPTIONS

Please review the following payment options that are currently available for taxpayers: 

  1. Electronic Funds Withdrawal (EFW) – EFW is available for most e-filed returns, allowing taxpayers to e-file and e-pay in one step. This is a direct transfer from the taxpayer’s checking or savings account for the payment of a balance due.
  2. IRS Direct Pay (Individual or Business) – With IRS Direct Pay, taxpayers can pay and receive instant confirmation the payment has been submitted, schedule or reschedule payments, cancel payments, and search for payment status. No account is required.
  3. Debit Card, Credit Card, or Digital Wallet – There are certain software vendors that will offer credit card payment options. There is an annual limit for the number of transactions that can occur for each type of payment.
  4. IRS Online Account (Individual or Business) – Individuals and businesses can create IRS online accounts that can be used to access their tax information and make payments from your bank account, schedule or cancel future tax payments, and view your payment history.

OUR RECOMMENDATIONS

  • We recommend that you review your current payment method for federal payments and refunds.
  • If you currently use paper checks, provide your bank routing and account number as soon as possible to the relevant agency (IRS, SSA, etc.).
  • If you are having difficulties, please reach out to us for advice on how to proceed with a possible exception process or alternative digital methods.

As always, please reach out if you have any questions or would like to discuss how this change may affect your specific situation.