The use of paper checks for federal payments has officially come to an end. Under Executive Order 14247, titled “Modernizing Payments To and From America’s Bank Account,” federal agencies, including the IRS and the Treasury Department, stopped issuing paper checks as of September 30, 2025. The order also requires that payments made to the government be handled electronically.
For millions of Americans who receive tax refunds, Social Security benefits, or other federal payments, it's important to understand how this change now affects you. This guide explains what’s happening, why it's taking place, and the steps you should take moving forward.
As of September 30, 2025, nearly all federal payments and collections have been transitioned to electronic formats. This covers IRS tax refunds, Social Security benefits, veterans’ benefits, and payments to federal vendors.
The change is driven by security, cost, and efficiency concerns. Paper checks carry higher risks—they’re 16 times more likely to be lost, stolen, or altered compared to digital payments. Check fraud has also increased sharply, rising 385% since the COVID-19 pandemic, with IRS and Social Security checks among the common targets.
Cost plays a role as well. Each paper check costs the government about $0.50 to process compared to $0.15 for an electronic transfer. Over time, the difference amounts to millions of dollars.
For individuals, electronic payments typically arrive faster, reduce trips to the bank, and provide clear digital records. They also cut down on delays caused by the mail system. These benefits are a key reason the government is moving to electronic payments.
This policy applies to all federal agencies that issue payments, including:
Payments affected include:
Most Americans already use electronic payments—93% of tax refunds and 98% of Social Security benefits are issued by direct deposit. However, approximately five million taxpayers previously relied on paper refund checks each year.
KEY TAKEAWAY: The amount of your benefit or refund has not changed—only the delivery method.
With the paper check option discontinued, making updates now helps you avoid delays or disruptions.
Action Steps:
As federal agencies phase out paper checks, you have several electronic options for both receiving and making payments.
IMPORTANT NOTE: While the IRS is still temporarily accepting paper checks for payments, taxpayers are strongly encouraged to transition to electronic methods now. This ensures payments are processed more quickly and avoids potential disruptions in the future.
Setting up these options is straightforward. For direct deposit, you will need your bank's routing number and account numbers. Work with your CPA or tax professional to ensure this information is current for direct deposits and electronic withdrawals.
The Treasury Department will allow exceptions for specific cases. Waivers may be granted for:
To apply for a waiver, call the Treasury Electronic Payment Solution Waiver Line at 1-855-290-1545 or complete FMS Form 1201W. Waivers are reviewed individually and are not automatically approved.
Unfortunately, major transitions like this one can create opportunities for fraud. Be cautious and watch for red flags, such as:
Remember, federal agencies will never contact you unexpectedly for personal or financial information. Only update your information through official government websites or verified phone numbers. If you’re unsure, contact the agency directly.
The end of IRS paper checks is part of a broader shift to digital payments across federal agencies. While many taxpayers won’t notice a change, those previously depended on paper checks should act immediately to avoid interruptions.
If you have questions about how this transition may affect you or a loved one, contact an LTax Team Member. We are here to help you review your options and make the switch smoothly.
LEGAL OR TAX: The information herein is not legal, such as trust or estate planning, advice, or tax advice. Any such information is provided for illustrative purposes only and must not be relied upon without the benefit of the advice of your lawyer and/or tax professional. Lido specifically disclaims any liability from any reliance on such information. Lido is not a legal service provider or tax professional and does not offer legal or tax advice. Should you desire to obtain tax or legal services or advice, you must enter into your own, independent engagement agreement with a licensed attorney or tax professional.