Federal Government to Eliminate Paper Checks by Fall 2025

IRS Paper Checks

On March 25, 2025, the President issued Executive Order 14247, Modernizing Payments To and From America’s Bank Account. The order directs a nationwide shift away from paper checks and money orders toward digital payments, aiming to cut costs, speed up transactions, and reduce fraud.

Why This Matters

According to the Executive Order, Treasury issued checks are 16 times more likely to go missing, be stolen, be undeliverable, or be altered compared to electronic transfers. The order also states that maintaining paper-based infrastructure cost taxpayers over $657 million in fiscal year 2024.

For taxpayers, IRS issued refunds will transition to electronic only payments, generally requiring recipients to have a U.S. bank account unless they qualify for an exception or alternative payment arrangement. Similarly, tax payments to the federal government will need to be made through approved electronic methods such as direct deposits, digital wallets, credit or debit cards, and real time transfers. The change is intended to improve speed, security, and reliability while reducing the risk of lost or delayed checks.

What Changes and When

  • Effective September 30, 2025, paper checks will no longer be issued for federal disbursements. This includes tax refunds, benefits, vendor payments, and internal government transfers, unless an exception applies.
  • All incoming federal payments such as fees, loans, taxes, and fines should also move to electronic systems as quickly as allowed by law.

Exceptions and Accommodations

The Treasury Secretary is authorized to allow limited exceptions for situations where electronic payments are not feasible, including:

  • Individuals without access to banking or electronic payment systems.
  • Emergency payments where electronic methods would cause undue hardship.
  • National security or law enforcement activities that require paper transactions.
  • Other special cases as outlined in regulations or guidance.

What’s Next

With less than 50 days remaining until the September 30, 2025 deadline, taxpayers should take action to prepare for the transition to electronic payments. While the IRS and Treasury continue finalizing operational details, taxpayers should establish direct deposit arrangements for refunds and familiarize themselves with electronic payment options including IRS Direct Pay, EFTPS, and approved third-party processors. Additional IRS guidance may come too late for smooth implementation for the upcoming tax filing deadlines in September and October.  Those who currently receive paper refund checks or make payments by mail should contact their bank or credit union now to set up direct deposit and explore the IRS’s free electronic payment options to avoid potential delays or complications.

Disclaimer: This post is for informational purposes only and is not intended as legal, accounting, or tax advice. Readers should consult with their tax professional or legal advisor regarding how Executive Order 14247 may apply to their specific situation