Important Electronic Payment Changes Coming
March 6, 2026
IRS Transitioning Away from Paper Checks
The IRS has recently issued updated guidance confirming that paper checks are being phased out as part of a government-wide effort to modernize payments, improve security, and reduce fraud. Beginning in late 2025, the IRS significantly reduced the use of paper refund checks and is continuing to expand electronic payment options for taxpayers. While the way you file your tax return is not changing, how you receive refunds and make payments is increasingly moving to digital methods, although there is time to plan.
For most taxpayers, refunds are now expected to be delivered electronically, primarily through direct deposit. Alternative options, such as prepaid debit cards, may be available for individuals without traditional bank accounts, and limited exceptions will apply in certain special circumstances. If banking information is not provided when filing, refunds may be delayed while the IRS requests updated details. It is important to note that the IRS will only request banking information by mail and will never contact taxpayers by phone or text for this purpose.
On the payment side, the IRS is encouraging individual taxpayers to transition away from mailing checks and money orders. While paper payments are still accepted for now, electronic methods are becoming the standard. Available options include IRS Direct Pay from a bank account, the IRS Online Account, debit or credit card payments, and digital wallets. Older systems such as EFTPS are being phased out for individuals, and taxpayers are encouraged to begin using newer online platforms.
At this time, the IRS has confirmed that checks and money orders will continue to be accepted during the transition period. However, the guidance makes clear that this is temporary. The IRS intends to further limit paper payments as electronic systems are expanded. As a result, taxpayers who still rely on mailed payments should expect that this issue may need to be addressed more formally later in the year, potentially shortly after the first quarter filing season, as enforcement and system changes continue.
Businesses are also affected by these changes. Most business tax returns now support direct deposit for refunds, allowing companies to receive funds more quickly and securely. Federal tax deposits must already be made electronically, and the IRS is expanding tools for bulk and payroll-related payments. Businesses that still rely on mailed payments should begin planning their transition to electronic systems. Note that under current IRS infrastructure, irrevocable trusts should consider setting up an EFTPS account to ensure the ability to make timely quarterly estimated tax payments.
To prepare for these changes, we recommend setting up or reviewing your IRS online account, becoming comfortable with electronic payment options available to you, and contacting our office if you have limited access to digital tools. Taking these steps now can help prevent delays and ensure a smoother experience in future tax seasons.
We understand that this transition may raise questions, especially for clients who have traditionally relied on paper checks. Our team is here to help you navigate these changes and ensure your information is properly updated. If you have any questions about how this guidance affects you or your business, please don’t hesitate to reach out to your Sisterson team member.
For most taxpayers, refunds are now expected to be delivered electronically, primarily through direct deposit. Alternative options, such as prepaid debit cards, may be available for individuals without traditional bank accounts, and limited exceptions will apply in certain special circumstances. If banking information is not provided when filing, refunds may be delayed while the IRS requests updated details. It is important to note that the IRS will only request banking information by mail and will never contact taxpayers by phone or text for this purpose.
On the payment side, the IRS is encouraging individual taxpayers to transition away from mailing checks and money orders. While paper payments are still accepted for now, electronic methods are becoming the standard. Available options include IRS Direct Pay from a bank account, the IRS Online Account, debit or credit card payments, and digital wallets. Older systems such as EFTPS are being phased out for individuals, and taxpayers are encouraged to begin using newer online platforms.
At this time, the IRS has confirmed that checks and money orders will continue to be accepted during the transition period. However, the guidance makes clear that this is temporary. The IRS intends to further limit paper payments as electronic systems are expanded. As a result, taxpayers who still rely on mailed payments should expect that this issue may need to be addressed more formally later in the year, potentially shortly after the first quarter filing season, as enforcement and system changes continue.
Businesses are also affected by these changes. Most business tax returns now support direct deposit for refunds, allowing companies to receive funds more quickly and securely. Federal tax deposits must already be made electronically, and the IRS is expanding tools for bulk and payroll-related payments. Businesses that still rely on mailed payments should begin planning their transition to electronic systems. Note that under current IRS infrastructure, irrevocable trusts should consider setting up an EFTPS account to ensure the ability to make timely quarterly estimated tax payments.
To prepare for these changes, we recommend setting up or reviewing your IRS online account, becoming comfortable with electronic payment options available to you, and contacting our office if you have limited access to digital tools. Taking these steps now can help prevent delays and ensure a smoother experience in future tax seasons.
We understand that this transition may raise questions, especially for clients who have traditionally relied on paper checks. Our team is here to help you navigate these changes and ensure your information is properly updated. If you have any questions about how this guidance affects you or your business, please don’t hesitate to reach out to your Sisterson team member.
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