Executive Order 14247, “Modernizing Payments To and From America’s Bank Account,” is ushering in a new era of digital payments for federal taxes. Starting after September 30, 2025, the IRS will process all tax payments and refunds electronically—paper checks will be a thing of the past, except for those who truly don’t have access to electronic banking. This change affects everyone: individuals, businesses, estates and trusts. Now’s the time to get ready and make sure you’re set up for electronic refunds and payments.
Why E-payments?
Shifting to electronic payment systems provides several advantages over traditional paper-based methods. E-payments help reduce processing times and minimize errors. They also lower administrative costs and enhance payment security.
Who Is Affected?
Individuals, businesses, trusts and estates are impacted by the executive order.
What is the Impact?
IRS refunds will be issued electronically via direct deposit into U.S. banks, IRS debit cards and prepaid debit cards after September 30, 2025.
The executive order also requires that payments to the IRS including estimated taxes and balances due must be processed through approved e-payment platforms. However, unlike refunds, the government has stated that electronic payments should be made as soon as practicable.
Payment options for individuals:
- IRS Direct Pay – a free, secure online service that allows individuals and businesses to make tax payments directly from their bank account
- Electronic Funds Tax Payment System (EFTPS) – a free system offered by the US Department of the Treasury to pay your federal taxes
- IRS Online Account – is a secure portal on the IRS website that allows individuals to access and manage their tax information and make payments
- Digital wallets
- Credit cards
- Wire transfers
Payment options for businesses, trusts and estates
- EFTPS
- Wire transfers
- IRS Direct Pay
Payment options for trusts and estates
- EFTPS
- Wire transfers
Who Faces Challenges?
- Bankless individuals will face significant barriers in complying with the new electronic payment requirements, making it important for them to consider opening a bank or credit union account to access their funds efficiently.
- Expats may face delays and complications in accessing IRS refunds or making payments due to the requirement for U.S.-based electronic payment options, making it advisable to maintain or open a U.S. bank account.
- Estates and trusts may face administrative and logistical challenges under the executive order’s mandate for electronic payments, mainly because of restricted payment options and the possible need to establish new banking arrangements.
As of now, there is no formal announcement of an extension or exemption for trusts, estates or other taxpayers who may face administrative challenges due to the new requirements. The government is aware of these challenges and is working on solutions.
The transition to electronic payments does not have a set date yet, but all payments made to the IRS should be made via electronic platforms as soon as practicable. It is important to prepare now to ensure you are ready for electronic payment and refund processing.
If you have any questions or concerns about how these changes may affect you, please contact your RKL advisor. We are here to help you navigate the transition smoothly.
