Important IRS Update: Transition to Electronic Payments Required by Sept. 30, 2025
The way the federal government issues and accepts payments is about to change. Under a recent Executive Order, paper checks will be phased out for all federal disbursements beginning September 30, 2025. This will affect a wide range of transactions, including IRS refunds, Social Security benefits, vendor payments, and other federal disbursements. In addition, taxpayers will eventually be required to make payments to the government electronically, although the start date for this requirement has not yet been set.
For most taxpayers, this represents a fundamental shift in how payments are managed with federal agencies—particularly the IRS. While some exceptions will exist in cases such as emergencies or lack of banking access, the government is expected to provide detailed guidance and conduct outreach ahead of the transition.
At BGM, we want our clients to be fully prepared. Once the IRS mandates electronic payments, certain transactions may be processed through our tax return software at the time of filing. However, in many situations, you’ll need to take direct action to ensure compliance. Now is the time to familiarize yourself with the IRS’s electronic payment tools and evaluate whether your current banking relationships support these methods.
Ways to pay the IRS electronically include:
- Direct Pay from a bank account (available to both individuals and businesses)
- Debit card, credit card, or digital wallet
- Payment through your IRS online account (individual or business)
- The Electronic Federal Tax Payment System (EFTPS)
- Same-day wire transfers (fees may apply)
- Electronic funds withdrawal when e-filing a return
Keep in mind that electronic payments are only recognized when the IRS actually receives the funds. Because settlement can take several days, payments should be submitted early to avoid late fees or penalties.
What you can do now:
- Create an IRS online account if you don’t already have one
- Review your existing payment methods
- Confirm that your banking setup is ready for electronic transfers
BGM will continue to monitor IRS updates and provide guidance as this change approaches. If you have questions about how this transition may affect you or your business, please contact your BGM client service advisor.
