Tax Alert: Treasury to Phase Out Paper Checks for Federal Disbursements and Payments
A recent Executive Order directs the U.S. Treasury to stop using paper checks and move entirely to electronic payment methods. Effective September 30, 2025, Treasury will no longer issue paper checks for federal payments, including tax refunds and benefit payments. In addition, any payments made to the federal government, including tax payments, must be made electronically wherever possible. The intent of this Order is to modernize federal payment systems, minimize check fraud, and create greater efficiency at Treasury.
The Order includes some limited exceptions for individuals without banking or electronic payment access, certain emergency payments, certain law enforcement activities, and in other special cases. In those cases, “individuals or entities qualifying for an exception” will be “provided alternative payment options.” Details on how to qualify for an exception, and specifics on the alternative payment options, are forthcoming.
The Order also directs Treasury to launch a full-scale public awareness campaign, to inform payment recipients of this change and offer guidance on accessing and setting up digital payment options in time for this shift away from paper payments.
We recommend that you start preparing for these changes now, to ensure a smooth transition. Please contact your GRF tax professional if you have questions or would like our help getting set up with using electronic payment systems going forward.
