The End of Paper Checks for Federal Payments and Refunds

August 27, 2025

By Holly Cushman, CPA
Shareholder

What’s Changing?

Earlier this year, President Trump signed Executive Order 14247, “Modernizing Payments to and from America’s Bank Account.” This order requires the U.S. Treasury and the IRS to fully transition to electronic payments by Sept. 30, 2025.

This means:

• All refunds (such as tax refunds) will be issued electronically.
• All payments to the government (such as taxes and penalties) must be made electronically.

Accepted Electronic Methods

For Refunds:

•  Direct deposit
• Debit or credit card
• Digital wallets
• Real-time payment systems

For Tax Payments:

• IRS Direct Pay
• Electronic Federal Tax Payment System (EFTPS)
• Electronic funds withdrawal (done as a part of your e-filed return)
• Debit or credit card
• Digital wallet
• IRS Online Account or IRS2Go Mobile App
• Same-day wire transfer
• Cash payments at authorized retail partners

Are There Exceptions?

The EO allows limited exceptions to be determined by the Treasury secretary. Treasury sought public input through June 30, 2025, but the Department’s recent Aug. 14 press release offered little detail. It advised Americans without bank accounts to open one or sign up for a Treasury-sponsored debit card.

What’s still unclear:

• Penalties for noncompliance
• Specific IRS procedures for exceptions

Why It Matters

This is a major shift for the 5.9 million taxpayers who were still receiving paper checks as of May 2025 and those who pay their taxes by check. To avoid disruptions:

• Set up secure electronic payment methods now
• Verify your banking information on upcoming tax returns
• Plan for electronic payment of any taxes or penalties due on or after Sept. 30, 2025, including quarterly estimates

What’s Next?

Further IRS guidance is expected soon to clarify:

• Compliance procedures
• Possible exceptions
• Any delays in implementation

We’ll continue monitoring updates from the IRS and Treasury as this transition unfolds. Don’t wait, ensure your electronic payment options are ready before the Sept. 30 deadline.

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