On March 25, 2025, President Trump signed Executive Order 14247 titled “Modernizing Payments to and from America’s Bank Account.” This executive order mandates the federal government discontinue the use of paper checks and transition entirely to electronic payments by September 30, 2025.
This change represents one of the most significant updates to federal payment systems in decades. It will affect how individuals receive refunds and benefits, as well as how businesses interact with the federal government when making or receiving payments.
Treasury Announcement
On August 14, 2025, the U.S. Department of the Treasury announced that paper checks for most federal payments will officially be phased out on September 30, 2025. This change aims to reduce fraud and theft, expedite payment delivery, and enhance efficiency across federal programs.
The Treasury emphasized that most Americans who already receive their benefits electronically will not need to take any action. However, individuals who still receive paper checks for Social Security, Veterans benefits, or other federal payments must act now to switch to direct deposit or another approved payment option.
How to Enroll in Direct Deposit
- Through our Tax Software: If we prepare your return, we can securely set up direct deposit of refunds or electronic payment of balances due directly through the software. If you have recently changed bank accounts, we kindly ask that you confirm your banking details with us so that we can handle the setup for you.
- Online at GoDirect.gov: GoDirect.gov is the official Treasury–Federal Reserve platform for enrolling in electronic federal payments. It allows you to set up direct deposits to a bank or credit union account or receive funds through a Direct Express® Debit Mastercard® if you do not have a bank account. This service ensures payments are faster, safer, and more reliable than paper checks.
- By Phone: Call the U.S. Treasury Electronic Payment Solution Center at 800-967-6857 (Mon–Fri, 9 a.m.–7 p.m. ET).
- Through Your Agency: Contact the federal agency that pays your benefit directly.
Key Changes
- Elimination of Paper Checks: All refunds, benefits, vendor payments, and other government disbursements will now be issued electronically only.
- Electronic-Only Payments: Payments to the government—including taxes, fees, penalties, and loan repayments—must also be made electronically. Paper check lockboxes will no longer be available.
- Scope of Impact: The mandate applies to all refunds and disbursements. It includes not only individual tax refunds but also refunds for businesses, trust/estates, and employment taxes.
- Secure and Efficient Transactions: Direct deposit and electronic funds transfer (EFT) are faster, safer, and less susceptible to fraud compared to paper checks.
Implications for Individuals
- Refunds and Benefits: If you currently receive tax refunds, Social Security, or other federal benefits by paper check, you will need to switch to direct deposit, a prepaid debit card, or another approved electronic method.
- Unbanked Households: Five to six million Americans still receive refund checks without a bank account. To avoid payment delays or costly alternatives, unbanked individuals should take the following steps:
- Open a low-fee or no-fee bank account at a bank or credit union. Look for FDIC “Bank On” certified accounts that are designed for new customers.
- Sign up for the Direct Express® Debit Mastercard®, a Treasury-sponsored card already used for Social Security and veterans’ benefits. Call 800-967-6857 or enroll at GoDirect.gov.
- Keep an eye on digital wallet options (such as PayPal, Venmo, or CashApp), which the Treasury and IRS are evaluating as future alternatives.
- Hardship Exceptions: The IRS is still finalizing rules for individuals without banking access. A clear application process is expected before the transition takes place.
- Exceptional cases: Estates, trusts, and U.S. citizens living abroad may encounter additional challenges due to account name mismatches or restrictions on foreign accounts. Further guidance from the IRS is anticipated.
Social Security and Federal Benefits Update
The Social Security Administration (SSA) has started implementing Executive Order 14247. As of July 2025, paper check options are being removed from SSA’s claims systems. Individuals who wish to continue receiving checks must apply for a Treasury-approved waiver. However, these waivers will be rare and subject to strict review.
As a result, starting this fall, nearly all recipients of Social Security, SSI, and Veterans benefits will need to use direct deposit or a Direct Express® card. Those still receiving checks should act now to avoid any disruptions.
Implications for Businesses
- Vendor Payments: Federal contracts will be paid electronically only.
- Tax and Fee Payments: Businesses must pay electronically; paper checks will no longer be accepted.
- Business Refunds: Overpayments, including employment tax refunds, will also be issued electronically.
- Action Step: Confirm banking info and EFT compliance now.
Exceptions
Limited exceptions may apply for:
- Individuals without banking access.
- Emergency payments.
- National security or law enforcement-related transactions.
- Other Treasury-approved cases.
Beginning October 1, 2025, Treasury will significantly reduce check-printing capacity by moving operations to a third-party provider. This means paper checks will be available only in extremely limited, approved exception cases.
How Burke Can Help
At Burke CPAs & Advisors, we understand that major transitions like this can be overwhelming. As your trusted advisor, we can assist you in several ways:
- Review your current payment methods and identify any gaps.
- Help individuals transition from paper checks to direct deposit or a prepaid debit option.
- Ensure that businesses have their EFT systems correctly set up for paying taxes, fees, and receiving federal payments, including refunds.
- Allow us to securely establish direct deposit for refunds or direct debit for tax payments as part of your return filing.
- Provide ongoing support as additional IRS, SSA, and Treasury guidance is released.
Our goal is to make this change seamless for you and to ensure there are no disruptions in how you or your business receive or make payments with the federal government.
Conclusion
Executive Order 14247 marks a transformative step in modernizing federal payments. By preparing now, enrolling in direct deposit, confirming business EFT details, or exploring prepaid card options, you can avoid disruptions and ensure a smooth transition when the September 30, 2025, deadline arrives.