On March 25, 2025, President Donald Trump signed Executive Order 14247, titled “Modernizing Payments To and From America’s Bank Account,” mandating a complete transition of federal disbursements, including Social Security benefits and tax refunds, to electronic payments by September 30, 2025.

The U.S. government is phasing out paper checks for Social Security benefits and tax refunds, moving toward a fully digital payment system. As fiduciary investment advisors in Greenville, SC, we are proactive in exploring why this change is happening, its benefits, potential hurdles, and how to prepare.

Why Paper Checks Are Being Eliminated

• Cost Savings: Printing and mailing checks cost taxpayers millions annually, about $1 per check versus cents for electronic payments.
• Efficiency: The Treasury Department has pushed digital payments since 2013, mandating electronic methods for most federal benefits.
• Deadlines: By 2025, paper checks for Social Security, SSI, and tax refunds are largely discontinued, with rare exceptions for remote areas or hardships.
• Adoption Rates: Over 90% of tax refunds and 95% of Social Security payments are now electronic, per IRS and SSA data.

Benefits of Digital Payments

• Speed: Direct deposits clear in days, while paper checks can take weeks to arrive.
• Security: Electronic payments reduce risks of lost or stolen checks—over 1 million checks were replaced in 2020 alone.
• Sustainability: Digital payments cut paper waste and carbon emissions from mail delivery.
• Convenience: Taxpayers get refunds faster, and beneficiaries access funds without trips to check-cashing services.

Challenges of Transition

• Unbanked Population: About 5% of U.S. households lack bank accounts, relying on checks or costly check-cashing services.
• Digital Literacy: Many seniors, a key Social Security demographic, struggle with online banking or setting up direct deposit.
• Alternative Options: The Direct Express prepaid debit card helps unbanked recipients, but some face issues with fees or limited card acceptance.
• Access Gaps: Rural residents or those with limited internet access may find the switch to digital payments daunting.

How to Prepare for the Change

• Set Up Direct Deposit: Open a bank account or update bank details with the SSA or IRS for seamless payments.
• Explore Direct Express: Unbanked individuals can enroll with Direct Express for benefit payments.
• Seek Assistance: Use SSA or IRS helplines, websites, or local community centers for guidance on transitioning.
• Act Early: Verify your deposit information is accurate with your tax professional, financial advisor, and/or banking professional to avoid delays.

The elimination of paper checks is not a surprise given the trend toward an increasingly digital world. By taking proactive steps, taxpayers and beneficiaries can navigate this shift smoothly, ensuring their Social Security benefits or tax refunds arrive securely and on time. 

Our fiduciary advisors at Global View are in-tune to the changing financial landscape for our clients. We would welcome your contact with any questions you may have.