On March 25, 2025, President Donald Trump issued an executive order for modernization in the federal payment system directing the U.S. Department of the Treasury to move from paper-based payments to electronic methods. This change applies from September 30, 2025, and is intended to reduce costs and improve efficiency, notwithstanding minimizing fraud associated with paper checks.
What changes did President Trump’s executive order introduce?
The executive order mandates that, starting September 30, 2025, the federal government will cease issuing paper checks for all disbursements. This includes:
- Tax refunds
- Social Security benefits
- Vendor payments
- Intragovernmental transfers
Payments to the federal government, such as taxes and fees, are also required to be processed electronically where feasible.
Why is the government moving away from paper checks?
The shift to electronic payments is driven by several factors:
- Cost reduction: Maintaining the infrastructure for paper checks cost taxpayers over $657 million in fiscal year 2024.
- Fraud prevention: Treasury checks are 16 times more likely to be reported lost or stolen compared to electronic transfers.
- Efficiency: Electronic payments are faster and less prone to delays than paper checks.
How will this affect your tax refunds and payments?
If you currently receive your tax refunds via paper check, you’ll need to provide the IRS with your bank account information to receive future refunds through direct deposit. For those who owe taxes, electronic payment options such as direct debit, credit cards, and digital wallets will be available.
Read more: How do I contact the IRS and speak to a person? Here are all the phone numbers you need
What about Social Security recipients?
Social Security beneficiaries who receive payments by paper check must switch to electronic methods by the September deadline. Options include direct deposit into a bank account or loading funds onto a Direct Express Debit Mastercard. The Social Security Administration provides guidance on making this transition.
Are there exceptions to the electronic payment mandate?
Yes, the executive order allows for limited exceptions, including:
- Individuals without banking access: Those who do not have access to electronic payment systems.
- Emergency situations: Certain emergency payments where electronic disbursement would cause undue hardship, such as those affected by natural disasters.
- National security concerns: Activities where non-electronic transactions are necessary or desirable.
The Treasury Department will provide alternative payment options for those who qualify for these exceptions.
How can you prepare for this change?
These are the steps that can be taken in preparation for this change:
- Open a bank account: If you are not having one, think of opening a bank account to have an easier access to electronic transactions.
- Update your records: Report your banking details to relevant federal agencies such as the IRS and Social Security Administration.
- Stay plugged on: Watch out for news and updates coming from federal agencies about this change and follow what they would say or recommend.
So by preparing yourself beforehand you could avoid the interruption on the receipt of federal payments and the new requirement of having to do that via electronic transfer.
Continue reading:
How to correct errors in a received IRS refund?
How do I contact the IRS and speak to a person? Here are all the phone numbers you need
