The federal government is modernizing its payment systems and is phasing out paper checks for tax refunds and federal benefits, marking a significant shift in how Americans receive payments. Beginning Sept. 30, 2025, the Internal Revenue Service (IRS), U.S. Treasury and Social Security Administration (SSA) will move to an all-electronic system, with direct deposit becoming the default method. While the change is designed to boost efficiency, reduce fraud, and cut administrative costs, taxpayers, especially those without bank accounts or living abroad, must take proactive steps now to avoid payment disruptions.

Many taxpayers still receive paper checks for tax refunds. Paper checks have been a longstanding but risky payment method. This is also the case with some Social Security benefits and other federal payments. Under an executive order (EO) signed by President Donald Trump, paper checks will no longer be an option, effective Sept. 30, 2025. Direct deposit will become the default (and only) method of payment, unless the government extends the deadline or provides exceptions.

In the EO, the president cited several reasons for eliminating paper checks. The shift is expected to reduce fraud, cut costs and speed up delivery of refunds and benefits. 

Please select this link to read the complete article from OSAP Mission Partner Clark Schaefer Hackett.