In a major move to modernize federal payments, former President Donald Trump signed an executive order on March 25 requiring all federal agencies to stop issuing paper checks by September 30, 2025. The new measure, titled “Modernizing Payments to and from the United States Bank Account,” aims to reduce costs, prevent fraud, and speed up transactions.
Why It’s Happening
The White House stated that the decision comes in response to a surge in mail theft complaints since the COVID-19 pandemic. Treasury checks, according to the executive order, are 16 times more likely to be lost, stolen, or altered compared to digital transactions.
Experts say the transition to digital payments will result in greater security and savings for taxpayers.
How Much Do Paper Checks Cost the Government?
Compared to digital payments, issuing paper checks—especially for tax refunds and Social Security benefits—costs the government 2 to 4 times more in operational expenses. This includes printing, mailing, and processing.
The U.S. Treasury Department, which sends out hundreds of thousands of paper checks annually, will now transition entirely to direct deposit, debit or credit cards, and digital wallets. Only a few exceptions will be made for Americans who are unbanked.
Checks Are Fading Out—But Not Everyone’s Ready
The push to reduce paper checks started back in 2010, with major steps taken in 2011 when Social Security and Veterans Affairs checks were removed. Still, many Americans continue to rely on them—especially older individuals.
A 2024 survey found that while 46% of Americans didn’t use a single check in 2023, about 22% of those aged 55 and older still use checks on a monthly basis. Experts warn this group is especially vulnerable to scams during the transition period.
How to Switch to Digital Payments
If you still receive tax refunds or government benefits by paper check, here’s how to prepare for the switch:
- Choose direct deposit when you file your next tax return. You’ll need to enter your bank routing and account numbers.
- Once your return is processed with a paper check, you can’t change it, so act early.
- If filing an amended return using Form 1040-X, you can choose direct deposit—but it only applies to the amended refund.
- Use the “Where’s My Refund?” tool to track your status.
- File electronically using IRS Free File (if eligible) and combine it with direct deposit.
- U.S. citizens abroad can receive deposits in foreign bank accounts. Using third-party bank accounts is not recommended.
Bottom Line
This change affects nearly every American who receives federal payments. If you’re still getting paper checks, now is the time to transition to digital. Not only will it speed up your payments—it’ll also help protect you from fraud and theft.