No more paper checks for federal payments

First Citizens Wealth INTEL: Insights and News—Taxation, Election & Legislation

Each month, we'll provide time-sensitive updates on tax, election and legislative developments that may affect you.

A recent executive order mandates that the US Treasury no longer issue paper checks for federal disbursements—including tax refunds, Social Security benefits and vendor payments—as of September 30, 2025. The federal government will transition to making electronic payments instead.

Who is impacted

The three main groups impacted are:

1. Social Security and other federal benefit recipients: This includes anyone currently receiving Social Security or veterans benefits. The Social Security Administration estimates that 69 million Americans receive an average of $1,700 in monthly benefits.
2. Taxpayers receiving their refunds by check: Those who receive IRS tax refunds by check are estimated to be 2/3 of Americans, with an average amount of just over $3,000.
3. Government contractors: This includes businesses or individuals who are paid by the federal government for any contracts or grants.

According to the White House, the mandate is intended to prevent fraud and reduce cost. US Treasury checks are 16 times more likely to be reported lost or stolen, returned deliverable or altered than electronic payments. Estimates show that discontinuing the use of paper checks could result in annual savings of $750 million.

What action is required—and when

While some minimal exceptions will apply, the US Treasury will stop issuing paper checks for federal disbursements on September 30, 2025. Action should be taken at your earliest convenience.

Individuals receiving federal payments

• Sign up for direct deposit or other electronic payment method: If you receive payments by check, provide a bank account for direct deposit or enroll in an approved prepaid debit card program to access benefit payments without a bank account. You can do both online or call the Treasury Electronic Payment Solution Contact Center at 877-874-6347.

Businesses sending or receiving federal government payments

• Enroll in electronic funds transfer systems: If your business receives federal payments via paper check, enroll through US Treasury systems like sam.gov or asap.gov. If you're already enrolled, ensure your account information is accurate in order to avoid delayed payments. If you make payments by check to the federal government, shift to electronic payment channels instead.
• Communicate with your finance teams: Alert your internal teams to the impending change so they can update systems and shift to reconciling payments electronically.

Who you should talk to now

Talk to your First Citizens Wealth consultant for help coordinating benefit payments into managed accounts, aligning payments with planned distributions and tax strategies, and supporting family members who rely on paper checks. For those with trusts or estate accounts receiving federal payments, discuss proper account titling and compliance as it relates to new electronic payment requirements.

For more detailed information, read the full executive order.