On March 25, 2025, an executive order was issued directing the U.S. Department of the Treasury and federal agencies, including the IRS, to eliminate the use of paper checks for payments to and from the federal government. The stated goal is to modernize federal payment systems, reduce fraud, and improve processing efficiency by moving to electronic payment methods such as direct deposit and electronic funds transfer (EFT).
Under the order, paper checks for federal payments, including IRS tax refunds, are expected to be phased out, with implementation targeted for late 2025. The order also signals a move away from paper checks for payments made to the IRS, such as tax and estimated tax payments. As of the current date, however, the IRS has not issued formal guidance detailing how the transition will be implemented, what exceptions may apply, or how taxpayers without electronic banking access will be accommodated.
Refund Timing Considerations
Taxpayers should be aware that refunds may be delayed if electronic payment information is not provided. Electronic refunds are typically issued within about 21 days, while refunds issued without direct deposit information may take six weeks or longer. Providing accurate direct deposit information remains the best way to avoid refund delays. Please be sure to provide direct deposit information when providing 2025 tax information – providing a voided check is the easiest option.
What Taxpayers Should Do Now
Even though detailed IRS guidance is still pending, taxpayers should assume the transition away from paper checks will occur and begin planning now. With fourth-quarter estimated tax payments approaching, this is an ideal time to adopt electronic payment methods such as IRS Direct Pay, EFTPS, or authorized electronic payment providers. However, for 4th quarter 2025 estimated tax payments, payment by paper check is still an option.
Transitioning to electronic payments now can help reduce the risk of late payments, mailing delays, and compliance issues as the IRS implements these changes.
