Prepare For The End Of Paper Checks: How The Federal Shift Affects Millions In 2025

Paper checks from the federal government–including Social Security payments, tax refunds, and vendor payouts–will officially be phased out by September 30th, 2025. Under a new executive order, all federal disbursements must be made electronically through direct deposit, prepaid debit cards, real-time transfers, or digital wallets. While some limited exceptions will apply, the U.S. Treasury is urging recipients to switch now to avoid payment delays. If you’re one of the roughly 45 million Americans still receiving paper checks from the government each year, this change could directly affect how and when you get paid. Here’s what you need to know: Why are paper checks going away? -------------------------------- While over 96% of federal payments are already digital, the remaining few million paper checks pose a significant risk to both individuals and government systems. According to the U.S. Treasury, the continued use of paper-based payments by the Federal Government imposes “unnecessary costs, delays, and risks of fraud, lost payments, theft, and inefficiencies.” Checks cost over three times as much to process as digital payments, and government-issued checks are 16 times more likely to be reported missing or altered than electronic deposits. Since the pandemic, the Treasury states that mail theft and check fraud have skyrocketed, with federal officials reporting hundreds of millions in fraudulent activity linked to paper checks. Eliminating paper checks is expected to save taxpayers up to $750 million a year. Haywood Talcove, CEO of LexisNexis Risk Solutions’ government group, stated: > Checks aren’t safe anymore. It’s where the criminal groups are feasting. Who will be affected by paper checks going away? ------------------------------------------------ The new executive order will impact anyone that receives federal payments by mail , including: * Social Security and disability beneficiaries * Taxpayers receiving IRS refunds via check * Veterans benefit recipients * Federal contractors or vendors paid via check If you’re among the 600,000 Social Security recipients who still receive a paper check, the government is strongly encouraging you to make the switch now to avoid future issues or delays. However, the Social Security Administration has clarified that no one will be cut off, and exceptions will remain in place for those who truly cannot access digital payments. What do you need to do? ----------------------- If you currently receive any sort of federal payment via check, you’ll need to: * Sign up for direct deposit – link a checking or savings account to receive payments directly (enroll online or by calling the Treasury’s helpline at 877-874-6347) * Use a prepaid debit card – if you don’t have a bank account, you can request a prepaid debit card, which is backed by the Treasury and works like a normal debit card * Stay updated – look out for official notices and make sure your contact information is up to date with any and all government agencies you receive payments from This includes payments *to* the Government ------------------------------------------ The new order doesn’t just pertain to how the government pays you–starting in September 2025, most payments to the government must also be made electronically. That includes things like: * IRS tax payments * Federal student loan repayments * Application or licensing fees Agencies like the IRS are urging people to switch to online platforms like IRS Direct Pay or EFTPS, which allow you to schedule and track payments securely. Are there any exceptions? ------------------------- Some exceptions do apply, but they are limited. Certain groups may still receive checks, such as: * People without access to banks or electronic payment options * Emergency or hardship situations * Some law enforcement or national security payments If you believe you qualify for an exception, more details on how to apply will be announced soon. Set up a digital payment method ------------------------------- Whether you get Social Security, tax refunds, or other federal benefits, you have until September to set up an online bank account or some form of digital payment option to ensure you continue to receive what you’re owed. Need help? Visit the Bureau of the Fiscal Service online or call the Treasury’s Electronic Payment Center at 877-874-6347. Source: https://secretnyc.co/federal-government-phasing-out-paper-checks-heres-what-to-know/