Federal Government Ending Paper Checks: What Taxpayers and Preparers Need to Know

Posted on by Traci Crabtree

A major shift in the way the federal government handles payments is underway. As part of an executive order issued in early 2025, the federal government is transitioning to a fully digital payment system—effectively ending the use of paper checks. For taxpayers and preparers, this isn’t just a policy update; it’s a timeline that could impact everything from tax refunds to estimated payments.

Why This Executive Order Matters

The executive order was introduced to modernize how the federal government disburses and receives funds. Paper checks and money orders, while familiar, are costly, inefficient, and vulnerable to theft and fraud. According to the administration, the infrastructure to maintain paper-based payments cost taxpayers over $650 million in a single year.

In contrast, electronic funds transfers (EFTs) are more secure, faster, and more cost-effective. Treasury checks are reportedly 16 times more likely to be lost, stolen, or altered compared to EFTs. This transition aims to bring all federal disbursements—including benefits, vendor payments, tax refunds, and intragovernmental transactions—into a fully digital format.

Key Deadline: September 30, 2025

The cutoff date for most paper disbursements is September 30, 2025. This timing is important: it falls just before the October 15 extended individual tax return deadline and could affect fourth-quarter estimated payments due in January 2026. Taxpayers who rely on mailing paper checks should start planning now to avoid delays or penalties. The federal government ending paper checks has major implications for how and when payments are made—especially during critical filing and payment deadlines.

Section 3(c) of the order also emphasizes that all payments made to the federal government—not just disbursements—should be made electronically as soon as practicable, reinforcing the government’s broader digitization goal.

How the Federal Government Ending Paper Checks Affects You

This change impacts taxpayers, businesses, and tax professionals alike. Here are the key ways you may be affected:

  • Refunds and Payments: All federal refunds and payments, including tax refunds, will need to be processed electronically. If you’re expecting a paper check for a refund, make sure your banking information is up to date.
  • Estimated Tax Payments: Electronic methods such as IRS Direct Pay, EFTPS, and IRS2Go should be used instead of mailing checks.
  • Tax Preparer Guidance: Preparers should inform clients of the change, recommend electronic payment options, and ensure clients aren’t at risk of missing deadlines due to outdated payment habits.

The federal government ending paper checks will require a cultural shift for many who are accustomed to paper-based methods—but proactive planning now can ease the transition.

Exceptions and Accommodations Still Exist

Section 4 of the executive order outlines exceptions. These include:

  • Individuals without bank access
  • Emergency or hardship situations
  • National security or law enforcement operations
  • Other discretionary exceptions by the Secretary of the Treasury

These carve-outs ensure that vulnerable populations or specialized circumstances are not penalized by the move to digital payments.

Implementation Strategy and Public Education

To support this shift, the Treasury will launch a public awareness campaign. Agencies must coordinate with Treasury to:

  • Educate payment recipients and taxpayers on the transition
  • Support those unfamiliar with digital tools
  • Collaborate with financial institutions to increase access for the unbanked or underbanked

Data privacy and cybersecurity are also central concerns, and agencies are tasked with safeguarding systems and personal information throughout this digital transformation.

Compliance Plans and Reporting

Every federal agency must submit a transition strategy to the Office of Management and Budget within 90 days of the executive order. These plans must:

  • Identify barriers to digital adoption
  • Propose solutions to eliminate paper-based payments
  • Establish timelines for compliance

The Secretary of the Treasury must also submit a progress report to the President within 180 days, summarizing milestones, setbacks, and future strategies.

Final Thoughts

With the federal government ending paper checks, now is the time for taxpayers, business owners, and preparers to prepare for a new standard. This move is more than just a procedural update—it’s a fundamental shift in how Americans interact with the Treasury.

Start transitioning today to digital payment methods and ensure your clients or business operations are ready well before the September 30, 2025 deadline. Need help understanding your payment options or setting up secure digital systems? MeredithCPAs is here to guide you every step of the way – contact us today!