Do you pay in when you file your tax return? Or maybe you pay quarterly estimates? Or do you receive refunds? Plan to start making and receiving payments via electronic methods only.
What’s Happening?
Signed on March 25, 2025, Executive Order 14247, “Modernizing Payments To and From America’s Bank Account,” is all about moving federal payments into the digital age. By September 30, 2025, nearly all payments to and from the federal government will need to be electronic. This means:
- No more paper checks for federal disbursements. Think tax refunds, Social Security benefits, or payments from government agencies – they will all be transitioning to electronic methods like direct deposit.
- Electronic payments will be required for payments to the government. This includes things like taxes, fees, and fines.
The U.S. Department of the Treasury is leading this initiative, pushing for the use of Electronic Funds Transfer (EFT) methods like direct deposit, debit/credit card payments, and even digital wallets. There might be a few exceptions for those without bank accounts or in emergency situations, but the clear direction is digital.
What are the Benefits?
- Increased Security: Paper checks are much easier targets for fraud, theft, and getting lost in the mail. Electronic payments are far more secure, protecting your money and personal information.
- Faster and More Efficient: Imagine getting your tax refund directly deposited a day or two after it is processed, rather than waiting for a check to arrive! Digital payments are processed much faster, saving time and hassle for everyone. Plus, it helps the government save hundreds of millions of taxpayer dollars spent on printing and mailing checks.
- More Reliable: No more worrying about checks getting delayed by postal issues. Electronic payments offer a more consistent and reliable way to handle your money.
How to Prepare:
- Set Up Direct Deposit: If you currently receive any federal payments via paper check (like your tax refund or Social Security), it is time to set up direct deposit with your bank. This is the safest and quickest way to get your funds.
- Verify Your Banking Information: Double-check that your bank account details on file with federal agencies (like the IRS or Social Security Administration) are accurate and up-to-date.
- Contact Your Accounting Firm: If your accounting firm e-files your tax returns, you will want to make sure they have your correct banking information for any direct deposit/debits for refunds or balances due.
- Explore Electronic Payment Options: If you typically make payments to the federal government, start looking into the electronic payment options offered by those agencies.
- Stay Informed: The U.S. Department of the Treasury will be releasing more information to help with this transition. We will do our best to keep you updated, but it is always a good idea to keep an eye on official government announcements.
We are here to help you navigate these changes. If you have any questions about how Executive Order 14247 might impact your specific tax situation or need assistance with setting up electronic payments, please do not hesitate to reach out to our team at JAK.
Executive Order 14247 FAQs
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Executive Order 14247 requires that nearly all federal payments shift to electronic formats, meaning traditional paper checks will be phased out. For businesses, this mandate ensures greater efficiency, faster deposits, and reduced risks of lost or stolen checks. However, it may also require changes to banking systems, internal accounting processes, and vendor management procedures. Companies should evaluate whether their accounts are properly set up to receive ACH transfers and ensure they have updated contact information with federal agencies. JAK helps clients review current payment structures, identify gaps, and develop a smooth transition plan that avoids disruption in cash flow.
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The implementation of Executive Order 14247 is already underway, and businesses should expect mandatory compliance deadlines soon. While some federal agencies have already transitioned to electronic payments, others will phase in over the coming months and years. Waiting until the last minute to prepare may cause delays in receiving federal funds or create compliance issues. JAK encourages clients to act now by setting up the proper banking systems, conducting internal process reviews, and educating staff. Preparing early ensures businesses stay compliant and prevents disruptions in revenue streams tied to federal contracts, reimbursements, or funding programs.
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Electronic payments provide numerous advantages over traditional checks, including faster deposits, reduced administrative costs, and improved recordkeeping. They also offer enhanced fraud protection, as digital transactions are more secure and traceable than paper checks. For businesses, this shift can simplify cash management, improve cash flow forecasting, and eliminate the uncertainty that comes with postal delays. Reconciliation also becomes more efficient, as payment data integrates seamlessly into accounting systems. JAK advises clients to view this change not simply as a compliance requirement but as an opportunity to modernize financial processes, improve efficiency, and strengthen overall cash management practices.
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Businesses that fail to prepare for electronic payments risk delayed or missed federal payments, which can cause significant cash flow challenges. Additionally, scrambling to update systems at the last minute can lead to errors, compliance violations, or unnecessary stress for staff. Failure to properly coordinate with banks may result in rejected payments or account mismatches. Beyond compliance, businesses risk falling behind competitors that take advantage of the efficiencies and cost savings of digital transactions. JAK works closely with organizations to evaluate risks, establish streamlined processes, and ensure that the transition to electronic payments is both smooth and sustainable.
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JAK supports clients through every stage of this transition, from reviewing bank account structures to updating payment workflows. We work with financial institutions to ensure ACH capabilities are set up correctly and help businesses identify potential weaknesses in their current systems. Beyond compliance, we focus on turning this requirement into an opportunity by improving cash management strategies and reducing inefficiencies. JAK also provides training and guidance for internal staff so they feel confident managing electronic transactions. With our expertise, organizations can move seamlessly into compliance with Executive Order 14247 while building stronger, more efficient financial systems for the future.