Executive Order Will End Paper Check Tax Payments and Tax Refunds
On March 25, 2025, President Trump signed an Executive Order that will generally bar the use of paper checks for making payments to or receiving refunds from the Treasury, including those related to taxes.
Here's a summary of the key points:
Effective Date: The order mandates that by September 30, 2025, the Treasury will cease issuing paper checks for all federal disbursements, including tax refunds.
Electronic Payments for Receipts: Payments made to the federal government, including tax payments, will also need to be processed electronically as soon as practicable and to the extent permitted by law.
Purpose: The goal is to modernize federal payments, reduce costs, improve efficiency, and combat fraud associated with paper checks. The administration highlights that paper checks are significantly more likely to be lost, stolen, undeliverable, or altered compared to electronic transfers.
Exceptions: The order acknowledges that exceptions will be made in certain circumstances. These include:
Individuals without banking or electronic payment access.
Certain emergency payments.
Specific law enforcement activities.
Other special cases as determined by the Secretary of the Treasury.
Transition to Electronic Methods: The order encourages the use of various electronic funds transfer (EFT) methods such as direct deposit, debit/credit cards, digital wallets, and real-time transfers.
Public Awareness Campaign: The Treasury Department will launch a public awareness campaign to inform individuals and entities about this change and provide guidance on accessing and setting up digital payment options.
This executive order signifies a significant shift towards electronic transactions for all dealings with the U.S. Treasury. Taxpayers and businesses will need to prepare for this change by ensuring they have access to and understand electronic payment options for both making payments and receiving refunds.
