Transitioning to Electronic Federal Payments in 2026

Answers to frequently asked questions about the new electronic payments order 

Executive Order 14247, directs the U.S. Department of the Treasury and the IRS to transition payments issued by the federal government to electronic payments and to cease issuing paper checks. Federal payments include intragovernmental payments, benefits payments, vendor payments, and tax refunds. At this time exceptions are made for individuals who do not have access to banking services or electronic payment systems, emergency payments where electronic disbursement would create undue hardship, and specific national security or law enforcement situations where non-electronic payments are necessary. 

The move to electronic payments is intended to reduce fraud, improve security, lower costs, and increase efficiency. As part of this transition, paper tax refund checks and other federal disbursements began phasing out on September 30, 2025. The frequently asked questions below address what these changes mean for individuals and businesses and how to prepare as the transition continues. 

What is the impact on individual payments and disbursements? 

Filing a tax return 

The process of filing a tax return is not changing, only how refunds are issued and how payments are made. 

Tax refunds 

Most individual taxpayers will receive tax refunds electronically, primarily through direct deposit, with limited exceptions where no electronic option is available. If direct deposit information is not provided, the IRS may request banking information by mail, and refunds could be delayed.

Note: The IRS will not request banking information by phone, text, or email. 

Taxpayers without traditional bank accounts will still have options, including certain prepaid debit cards, mobile payment solutions, and limited exceptions to electronic delivery. Providing refunds electronically is expected to be faster and more secure than paper checks. 

What actions should businesses take now?  

The IRS is expanding its capabilities to receive and disburse payments to businesses electronically. Over time, paper refund checks for businesses will be phased out, with limited exceptions for hardship or legal and procedural requirements.  

Businesses are encouraged to use electronic payment options such as IRS Business Tax Accounts, EFTPS, or other approved digital payment methods. Certain business payments, including Federal Tax Deposits, must be made electronically and may be subject to penalties if paid by non-electronic means without reasonable cause. Businesses that rely on bulk or high-volume payments, such as payroll or trustee accounts, can expect expanded digital payment solutions and additional IRS guidance.  

What does this mean for payments to the IRS? 

The Executive Order also applies to payments made to the IRS, including tax balances due, fees, penalties, and other remittances. While checks and money orders are still accepted for now, the IRS is encouraging taxpayers to transition to electronic payment options. Electronic payments are meant to provide immediate confirmation and reduce the risk of delays, errors, or lost payments. 

Payment options 

• Available electronic payment methods include IRS Direct Pay, IRS Online Accounts, debit or credit cards, digital wallets, and EFTPS (with a planned phase-out for individual taxpayers). 
• Limited exceptions will continue to apply for hardship, legal, or procedural circumstances where electronic payment options are not available. 
• Note: There are frequency limits on how often a taxpayer can use debit cards, credit cards or cash to make certain types of tax payments for specific forms and tax years.  

What payment options are available to trustees and other third-party payers? 

Trustees and other third-party stakeholders who make payments to the IRS on behalf of others should expect to transition to utilizing electronic payment methods. As additional electronic options become available, trustees may need to evaluate and update their internal systems to support these payment channels.  

Currently, certain third parties, including trustees and tax professionals, may use the EFTPS Batch Provider tool to submit multiple federal tax payments on behalf of clients or related entities. The IRS has indicated it will provide ongoing guidance, training resources, and outreach to assist during this transition.  In situations where electronic payment methods are not available due to hardship or legal or procedural limitations, the IRS will continue to accept paper checks. 

Read more for specific steps trustees need to take before setting up online accounts. 

Navigating new payment requirements and timelines may raise questions for individuals, businesses, and trustees. Your Opportunity Advisor will continue to monitor developments and provide updates as more information becomes available.  

Access the IRS FAQ sheet for full details.   

Tax Payments to be Remitted by Electronic Payment