Effective date: September 30, 2025
Applies to: Payments to the IRS and most federal disbursements, including tax refunds
Bottom line: Paper checks and money orders are being phased out. Use electronic methods like IRS Direct Pay, EFTPS, or approved cards and digital wallets.
What changed
On March 25, 2025, the White House issued an Executive Order directing the federal government to move to electronic payments and collections. The order instructs Treasury to stop issuing paper checks for federal disbursements and to shift incoming federal receipts, including taxes, to electronic processing, with limited exceptions.
Treasury has since confirmed the deadline and is winding down paper check operations around that date, which will reduce check capacity to only qualifying exceptions.
What this means for taxpayers
Paying balances due and estimates
Clients should pay electronically using one of these IRS supported options:
- IRS Direct Pay from a bank account, suitable for individuals and many small businesses.
- EFTPS (Electronic Federal Tax Payment System), best for businesses, fiduciaries, and anyone who wants to schedule quarterly estimates ahead of time.
- Debit or credit card, or an approved digital wallet via IRS authorized processors. Fees may apply. Employers cannot use cards for federal tax deposits.
Direct debit through the e-filed return remains allowed, but it is not required. Any approved electronic method satisfies the mandate.
Refunds
The IRS will prioritize electronic refund delivery. Paper refund checks will be limited to exception cases. Clients should ensure routing and account numbers are current.
Who is affected
- Individuals, trusts, estates, and businesses making federal tax payments, including balances due, extensions, and estimated taxes.
- Vendors and benefit recipients for federal programs, for disbursements moving to electronic delivery.
This order governs federal payments and receipts. State tax procedures are separate.
Exceptions and accommodations
Limited exceptions will exist where electronic methods are not feasible, such as lack of access to banking services, certain emergency payments, or specific national security or law enforcement needs. Treasury will issue further guidance on exception procedures.
What happens if someone mails a check after September 30
There is no new stand-alone “check penalty” announced. The practical risk is that a mailed check may be rejected or delayed, leaving the tax unpaid, which triggers existing failure to pay penalties and interest until an electronic payment is completed.
- Failure to pay penalty generally 0.5% per month, capped at 25 percent, reduced to 0.25 percent while an approved individual installment agreement is in effect.
- IRS interest on underpayments is based on the federal short-term rate plus 3 percent, compounded daily, and set quarterly.
How to pay, step by step
IRS Direct Pay
- Go to IRS Direct Pay.
- Select the reason for payment, for example balance due or estimated tax.
- Enter filing year and verification information.
- Enter bank routing and account numbers.
- Confirm and submit.
Pay now or schedule a date. For very large payments consider EFTPS or same-day wire.
EFTPS
- Enroll online, then activate using the mailed PIN.
- Log in, choose the tax form and period, enter the amount, and schedule.
- Save the confirmation number.
EFTPS allows scheduling estimates up to a year in advance and is ideal for recurring payments.
Card or digital wallet
Use an IRS approved processor and review fees. Cards are not allowed for employment tax deposits.
Timeline and what to expect next
- Now through September 2025: Agencies and Treasury continue implementation. Public awareness and exception guidance are rolling out.
- September 30, 2025: Treasury stops issuing most paper checks, and agencies move receipts to electronic processing to the extent permitted by law. Expect sharply reduced check capacity with exceptions only.
Frequently asked questions
Do I have to authorize direct debit on my tax return?
No. Paying through the return is optional. IRS Direct Pay, EFTPS, and approved card or digital wallet methods are acceptable.
Can I still mail a check with my 1040-ES voucher?
After the effective date, do not mail checks for estimates. Use Direct Pay or EFTPS.
What about clients without bank accounts?
Treasury will maintain limited exceptions and will publish options for those without banking access. We will help clients navigate those exceptions as guidance is released.
Does this change payroll tax deposit rules?
Most employers already use EFTPS for deposits. Continue using EFTPS in line with existing requirements.