Important Update: Federal Transition to Electronic Payments

The President issued an Executive Order directing the U.S. Department of the Treasury and all federal agencies to transition from paper-based payments (such as checks and money orders) to electronic payments. This change is intended to reduce fraud, improve efficiency, and lower costs associated with paper transactions.

Key Points You Should Know:

  • Effective Date: Beginning September 30, 2025, the Treasury will phase out paper checks for federal payments, except for limited exceptions provided in the Order. This applies to tax refunds, benefits payments, vendor payments, and intragovernmental transfers.

  • Electronic Payment Methods: Payments will be issued through electronic funds transfer (EFT), such as direct deposit, prepaid card accounts, debit/credit card payments, digital wallets, and real-time payment systems.

  • Receipts to the Government: Federal agencies will also begin requiring that payments to the government (taxes, fees, fines, and loan repayments) be made electronically to the extent permitted by law.

  • Exceptions: Limited exceptions may be available for:

    • Individuals without access to banking services

    • Certain emergency situations where EFT would cause undue hardship

    • National security or law enforcement-related activities

    • Other circumstances as determined by the Treasury

  • Public Awareness Campaign: Treasury and federal agencies will provide guidance to help individuals and businesses transition smoothly to digital payment systems.


What This Means for You:
If you currently receive federal payments by check or make payments to the federal government via paper methods, you should plan to transition to electronic options before September 30, 2025, unless you qualify for an exception. Most taxpayers and businesses already use direct deposit or electronic payment platforms, so many will see minimal impact. However, if you or your business still rely on paper checks, it is important to begin planning now to avoid disruptions.

We will continue to monitor guidance from the Department of the Treasury and provide updates as more details become available. If you have any questions about how this change may affect you or your business, please reach out to us. We are here to help.

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