Executive Order Requires Electronic Payment of Federal Tax

On March 25, President Donald Trump signed Executive Order 14247, Modernizing Payments to and from America’s Bank Account. The Executive Order is intended to modernize financial operations, reduce costs, minimize fraud, and eliminate inefficiencies associated with paper-based transactions.

Processing paper checks reportedly costs the government over $657 million in fiscal year 2024.

Under the order, tax payments, including Federal estimated taxes, must be made electronically. Payments made by check or money order will no longer be accepted after Sept. 30. In addition, Federal tax refunds will no longer be issued as paper checks and must be received via direct deposit or another electronic method.

Note that the third quarter 2025 Federal estimated tax payments due on Sept. 15 are not affected by this the order. However, fourth quarter 2025 Federal estimated tax payments due on Jan. 15, 2026, must be submitted electronically.

The IRS provides several electronic payment options that can be used to comply with the new mandate:

• IRS Direct Pay – This free service allows you to pay your taxes directly from your checking or savings account. https://www.irs.gov/payments/direct-pay-with-bank-account
• Electronic Federal Tax Payment System (EFTPS) – A free, secure service from the U.S. Treasury is available for both individual and business taxpayers. https://www.irs.gov/payments/eftps-the-electronic-federal-tax-payment-system
• IRS Online Account – Through your online account, you can manage and make payments
• Debit/Credit Card or Digital Wallet – Payment can be made via a third-party processor online, by phone or through the IRS2Go app. Convenience fees may apply.
• Electronic Funds Withdrawal – When e-filing through tax software or a tax professional, you can directly withdraw the payment from your bank account. Please note that this option will be available beginning with the filing of your 2025 annual tax return.

There are a few exceptions to this order:

• Individuals without access to baking or digital payment services.
• Those in emergency situations.
• Individuals who qualify under other legal exemptions, as determined by the Treasury Secretary.

To prepare for the new electronic payment requirement, taxpayers should take the following steps:

• Set-up an IRS online account or EFTPS account. In setting up an account, it will allow you to view your tax balance, schedule and manage payments and access other information.
• Verify your bank information. Ensure your bank account and routing number are up to date for electronic tax payments and tax refund deposits.

Many of our clients already have electronic payment accounts set up with the Federal government, the State of Ohio (https://tax.ohio.gov/individual/payments/pay-online-page) and the Regional Income Tax Agency (https://www.ritaohio.com/individuals/home/payment).

Utilizing these services is a safe, secure, and efficient way to manage payment of your tax liabilities. If you have questions regarding electronic payment options, feel free to contact a member of your Client Service Team.