Reminder: IRS Phasing Out Paper Checks Soon
As previously reported, President Trump signed Executive Order 14247 on March 25, 2025, which would change how the federal government handles payments by phasing out paper options (such as checks and money orders) and mandating electronic options as much as possible. On September 23, 2025, the IRS and US Treasury announced that tax refund checks for individual taxpayers will be phased out starting on September 30, 2025, to the extent allowable by law. This is the federal government’s first step in transitioning to electronic payments, which will also eventually apply to payments made to the IRS.
For the 2026 tax filing season, the IRS will issue detailed guidance shortly about what this means for 2025 tax returns. However, until such guidance is available, the IRS advised that taxpayers should continue to use existing forms, procedures, and payment options, including for 2024 returns that are being filed on extension.
Why is the federal government moving to electronic payments? The change protects taxpayers, as paper checks are 16 times more likely to be lost, stolen, altered, or delayed. Electronic refunds are faster (21 days by direct deposit versus 6 weeks or more by mail). It also cuts down on costs, as such payments are more efficient and cost less than paper checks.
What does this change mean for taxpayers? While it won’t change the way taxpayers file their taxes, it will mean that most refunds will be digital, delivered by direct deposit or another secure electronic method. For those taxpayers without access to bank accounts, other options will be available, including prepaid debit cards, digital wallets, or other limited exceptions. Taxpayers should take action now to ensure that they know banking information, or they might want to consider opening a bank account if they don’t already have one. The move to electronic refunds is actually not as big a transition as it might seem – the IRS reports that of the 93.5 million tax refunds that were issued to individual taxpayers for the 2025 filing season, 93% (approximately 87 million) were issued by direct deposit.
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If you have questions about the information outlined above or need assistance with an ERC related tax issue, Klatzkin can help. For additional information call 609-890-9189 or click here to contact us. We look forward to speaking with you soon.