US Phasing Out Paper Checks for Tax Refunds, Most Federal Payments
The US is phasing paper checks for tax refunds, Social Security and most other federal payments starting this month. Instead, the government is focusing on electronic payments, particularly direct deposit.
Why Is the US Phasing Out Paper Checks?
According to the Treasury Department’s Bureau of Fiscal Service, paper checks are more than 16 times more likely to get lost, stolen, altered, or delayed. “Electronic payments such as direct deposit are safer than checks, allow quicker access to funds, and have less risk of fraud,” says Fiscal Service Chief Disbursing Officer Linda Chero.
Who Is Affected?
The US phasing out paper checks will affect almost anyone receiving a federal payment. That includes people receiving Social Security, veterans, and taxpayers receiving a refund after filing their 2025 tax return in 2026.
Up until now, most taxpayers getting a refund could expect to receive a direct deposit within two to three weeks of filing. On the other hand, refunds issued by check have taken more than six weeks to process.
What Alternatives to Paper Checks Are Available?
Most payees will prefer to use direct deposit, where the government transfers your funds directly into your bank account. For those without a bank account, another alternative is the Direct Express debit card. Direct Express is a Treasury-sponsored debit card where you can receive your monthly benefit payments electronically. Individuals can sign up by calling Treasury’s Electronic Payment Solution Center at 800-967-6857 or by contacting their paying agency directly.
Possible Problems with the US Phasing Out Paper Checks
According to a recent report, 4.2 percent of U.S. households — or 5.6 million people — do not have a checking or savings account, making paper checks a necessity. In addition, US citizen living abroad may find banks in other countries will not accept electronic transfers from the US government. And there are religious communities in the US who want to avoid dealing with electronic systems.
Links
To enroll in electronic payments, visit the government website Go Direct.
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