Cashing in on change: paper checks from US government ending by October
The paper check, once a mainstay of federal payments, is nearing its end. Starting Sept. 30, the U.S. Department of the Treasury will stop issuing paper checks for most federal payments, requiring electronic deposits instead.
Paper checks near the end
For years, millions of Americans waited for the familiar envelope carrying their tax refund or benefit check. That long-time practice will soon be replaced by automatic transfers, part of a broader federal effort to modernize the payment system. Officials say the shift will cut down on fraud, theft and delays while saving money on printing and mailing.
White House officials pointed to rising security concerns as a driving force behind the change. Mail theft complaints have increased significantly since 2020, and Treasury checks are 16 times more likely than electronic transfers to be lost, stolen or altered. Banks reported about 680,000 cases of check fraud in 2022, nearly double the number from the year before.
The change will not affect most people. The Treasury Department says the vast majority of Americans already receive federal benefit payments, like Social Security, through direct deposit or other electronic methods. For the small number who still receive paper checks, the department is urging them to switch to an electronic option before the deadline.
Trump executive order directs modernization
The executive order signed by President Donald Trump on March 25 directs the federal government to modernize the general fund, often referred to as America’s bank account. Treasury officials said maintaining the infrastructure for paper transactions costs taxpayers more than $657 million in fiscal 2024 alone.
Agencies must transition recipients to direct deposit, prepaid card accounts or other digital methods. Limited exceptions will remain for people without access to banking services, certain emergencies, national security needs and other cases defined by the Treasury Department. The order also requires a public awareness campaign and coordination with financial institutions to support unbanked and underbanked households.
Support for unbanked and underbanked households
According to the 2023 FDIC National Survey of Unbanked and Underbanked Households, approximately 4.2% of U.S. households, about 5.6 million, were unbanked, meaning no one in the household had a checking or savings account at a bank or credit union. Additionally, 17.9% of households were underbanked, relying on alternative financial services like prepaid cards or check cashing. This translates to nearly 25.6% of U.S. households lacking full access to traditional banking services.
The transition to electronic payments, as mandated by the executive order, poses challenges for these households. Without access to bank accounts, many individuals are excluded from direct deposit options, potentially leading to delays or difficulties in receiving federal payments.
IRS data shows electronic payments dominate
The IRS’s Fiscal Year 2026 Objectives Report to Congress shows direct deposit remains the dominant way Americans receive their refunds. In the 2025 filing season, the agency processed about 138.1 million individual tax returns and issued 86 million refunds worth roughly $253.1 billion. Of those, 81 million were delivered electronically.
Paper, however, continues to slow the system. The report notes that about 4.4 million individual and business returns filed on paper required manual processing in 2025. As of mid-April, more than 8.2 million total returns, paper and otherwise suspended, were still awaiting resolution, often due to errors, identity theft filters or mismatched taxpayer information.
The post Cashing in on change: paper checks from US government ending by October appeared first on Straight Arrow News.
Ella Rae Greene, Editor In Chief
