In March of this year, the White House released Executive Order 14247: Modernizing Payments To and From America’s Bank Account, directing federal agencies and programs to move to electronic methods for making and receiving federal payments. From this, the IRS issued additional guidance, advising that they would be phasing-out paper checks beginning September 30, 2025. This article covers what you need to know as you prepare for the upcoming tax season.

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Why is the IRS phasing out paper checks?

The Executive Order outlines several reasons for the change:

Security—electronic delivery greatly reduces the risk of checks being lost, stolen, altered, or delayed in the mail.

Speed—electronic tax refunds are delivered faster than paper checks. When opting for direct deposit or other electronic refund options, you’ll typically receive your refund within 21 days, while folks opting for a paper check often wait upwards of 6 weeks.

Cost Efficiency—the move from paper checks helps the federal government reduce costs and conserve time typically associated with printing and mailing.

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What does this mean for me?

Moving forward, the IRS will generally eliminate paper check refunds, with few exceptions. Ultimately, most tax payers will be unaffected by this change. According to the IRS, 93% of taxpayers are already using electronic means to receive their refunds. Keep in mind that this change only affects your 2025 tax year return. If you have taxes to file or pay from previous years, you can continue making and receiving your payments as you typically would.

Are there any exceptions?

Limited exceptions will be made for taxpayers and federal benefit recipients who do not have access to banking services/electronic payment methods or live abroad, and for some emergency situations (like FEMA assistance).

How will I receive my tax refund?

Direct deposit is the quickest and safest way to receive your federal tax refund. And, there are a few ways you can take advantage:

• Checking, savings, or retirement accounts—in the Refund section of your tax return, enter the account and routing numbers to have your refund deposited into your desired account. Remember, if you’re planning to have your refund deposited into a retirement account, you’ll need to inform your IRA trustee.
• Prepaid cards—you might choose to have your refund loaded onto a prepaid card (like your smiONE™ Visa® Prepaid Card!). Similarly, you’ll enter your prepaid card’s account and routing numbers in the Refund section of your tax return so the IRS knows where to send it.
• Virtual wallets and mobile apps—the IRS can also use account and routing numbers from payment apps and virtual wallets, like PayPal, to send your tax refund.

The IRS will be releasing additional guidance as we get closer to the filing season.

How will I pay the taxes I owe?

There is no immediate change to how you file or pay taxes. While the Executive Order requires all federal disbursements (or payments from the federal government) to transition to electronic methods starting September 30, 2025, the IRS has noted that incoming tax payments may continue using existing methods (including paper checks) until 2027.

If you’ve been paying your taxes using checks or money orders up to this point, we recommend that you begin considering your options for electronic payment methods now, so you can be prepared when that change goes into effect. Your options for making electronic tax payments include:

• IRS Direct Pay—allows you to initiate a one-time secure payment to the IRS from a checking or savings account, debit or credit card, or digital wallet at no cost and without creating an account.
• IRS Online Account for Individuals—create an online account with the IRS to access your tax records and information, view and make payments, and create payment plans.
• Same-day Wire—complete the form and get in touch with your financial institution to send a same-day wire transfer.
• Electronic Funds Withdrawal (when e-filing)—initiate a direct debit from your designated bank account during the filing process. You may opt to use an electronic funds withdrawal ONLY when you are filing electronically with a tax professional or tax preparation software.

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Getting Ready for Tax Season

The federal move to electronic payments is a big step towards modernization, and it aims to enhance the speed, security, and efficiency of the tax process. Being prepared for big changes like this can often make them seem less overwhelming, so if you haven’t yet, start taking steps to prepare for an electronic refund as soon as possible.

Keep in mind that the tax agency for your state may have their own requirements for electronic payment delivery, or they may still offer paper checks. To be safe, we recommend checking your state agency’s website for additional details before filing your state return.