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.