Update:
On March 25, 2025, an executive order was signed directing the U.S. Department of the Treasury to phase out the use of paper checks for federal transactions by September 30, 2025. This change applies to both incoming and outgoing payments, including tax refunds and payments to the IRS.
Background Information:
The shift to electronic payments is designed to streamline operations, strengthen fraud protection, and significantly cut costs. In fact, the federal government spent more than $657 million in 2024 maintaining the infrastructure required to process and digitize paper records—costs that could be reduced with this digital-first approach.
What You Need to Know:
Beginning this fall, all federal payments will be made through Electronic Funds Transfer (EFT), which includes:
- Direct deposit into your bank account
- Prepaid debit card accounts
- Other approved digital payment systems
There are limited exceptions where paper checks may still be used:
- If the taxpayer does not have access to banking services
- In emergency situations where an electronic payment would cause undue hardship
- For reasons related to national security or law enforcement
All federal tax refunds will also be sent exclusively via EFT. If you’re planning to make a tax payment or are expecting a refund after the September 30 deadline, it’s important to get your accounts ready ahead of time.
What You Should do to Prepare:
- Make sure you have an electronic payment method in place
- Confirm or update your bank account information with the IRS
While this transition is part of a larger effort to modernize the government’s financial systems, it also brings tangible benefits to taxpayers—faster payments, increased security, and fewer lost or delayed checks.
If you’re unsure whether your current setup meets the new requirements, or if you need help selecting an EFT option, we’re here to help. Let us know how we can support you during this change.