We thought about posting this news yesterday but decided not to just in case someone thought it was an April Fools’ joke. And lookie here, someone did.
Is this some kind of April Fool’s joke?
U.S. Treasury to Eliminate Paper Checks: What It Means for Tax Refunds, Social Security https://t.co/xuWcH2uhk3
— Brian Streig, CPA (@cbriancpa) April 1, 2025
As Brian knows by now, it is not a joke.
On March 25, President Trump issued the executive order Modernizing Payments To and From America’s Bank Account. Anyone else think “America’s bank account” sounds cool? Surely there are multiple bank accounts but whatever.
Here’s what it says:
The continued use of paper-based payments by the Federal Government, including checks and money orders, flowing into and out of the United States General Fund, which might be thought of as America’s bank account, imposes unnecessary costs; delays; and risks of fraud, lost payments, theft, and inefficiencies. Mail theft complaints have increased substantially since the COVID-19 pandemic. Historically, Department of the Treasury checks are 16 times more likely to be reported lost or stolen, returned undeliverable, or altered than an electronic funds transfer (EFT). Maintaining the physical infrastructure and specialized technology for digitizing paper records cost the American taxpayer over $657 million in Fiscal Year 2024 alone.
This order promotes operational efficiency by mandating the transition to electronic payments for all Federal disbursements and receipts by digitizing payments to the extent permissible under applicable law (but not, for avoidance of doubt, to establish a Central Bank Digital Currency).
Whew. Thank goodness for that parenthesized clarification.
Browsing reaction to this news yesterday we found many people asking why this hadn’t been done sooner. And there’s this guy in Brian’s replies:
At first, I wondered if this was an April Fool’s joke too. But seriously, one of the biggest shocks when I moved to the U.S. years ago was how widely checks are still used…something most other advanced economies phased out long ago
— Mr NQDC (@Glen_NQDC) April 1, 2025
This feels like credit/debit card chip payments (EMV) all over again, something we as a country are still figuring out.
The executive order requires Treasury to cease issuing paper checks “for all Federal disbursements inclusive of intragovernmental payments, benefits payments, vendor payments, and tax refunds” by September 30, 2025 with a few exceptions. Those exceptions are:
- Individuals who do not have access to banking services or electronic payment systems;
- Certain emergency payments where electronic disbursement would cause undue hardship, as contemplated in 31 C.F.R. Part 208;
- National security- or law enforcement-related activities where non-EFT transactions are necessary or desirable; and
- Other circumstances as determined by the Secretary of the Treasury, as reflected in regulations or other guidance.
Nice to see they gave consideration to the unbanked. The 2023 FDIC National Survey of Unbanked and Underbanked Households found that as of 2023, 4.2 percent of US households — representing about 5.6 million households — were unbanked. The EO directs the Secretary of the Treasury to work with financial institutions, consumer groups, and other stakeholders to address financial access for unbanked and underbanked populations.
Ironically, the House passed H.R. 1155 Recovery of Stolen Checks Act two days ago. This act would allow taxpayers whose refund checks are stolen to choose to receive a replacement tax refund by direct deposit rather than a paper check. Again, why was this not a thing before?
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