Understanding the New IRS Electronic Payment and Refund Mandate for Trusts and Estates

On March 25, 2025, Executive Order 14247 was issued, requiring that all federal payments, including tax payments to the IRS, be made via electronic funds transfer (EFT). This mandate is part of a broader government initiative to modernize payment systems and reduce reliance on paper checks. The IRS is required to cease issuing paper checks by September 30, 2025, and all payments to the federal government, including those from trusts and estates, must be processed electronically as soon as practicable.

This change presents unique challenges for trusts and estates. Unlike individual taxpayers, trusts and estates cannot use IRS Direct Pay, and Form 1041 (the U.S. Income Tax Return for Estates and Trusts) does not currently include fields for direct deposit or electronic payment information. As a result, trusts and estates have the following options for making payments:

1. Wiring funds directly from a financial institution to the IRS.
2. Using the Electronic Federal Tax Payment System (EFTPS) (recommended).
3. Providing bank information for ACH withdrawal via Axcess at the time of filing their 2025 income tax returns.*

These options require advance planning. Wire transfers may involve additional costs and require coordination with the client’s financial institution. EFTPS, while free, requires an enrollment process that can take several days or longer to complete.

How to Register for EFTPS

To comply with the new mandate, trustees and administrators should register for EFTPS as soon as possible. Follow the steps below to register.

1. Gather the required information, listed below.

• • The trust’s or estate’s Employer Identification Number (EIN)
  • The name and address of the trust or estate as it appears on IRS records
  • The bank account and routing number from which payments will be made

2. Begin the enrollment process.

• • Go to https://www.eftps.gov/eftps/.
  • Click on “Enrollment” and select “Business” (trusts and estates are considered businesses for this purpose).
  • Complete the online enrollment form, providing the EIN, name, address and bank account information.

3. Wait for the Personal Identification Number.

• • After submitting the enrollment, the IRS will mail a Personal Identification Number (PIN) to the address on file for the trust or estate.
  • This PIN is required to activate your EFTPS account and authorize payments.
  • Important: The PIN is sent by mail and cannot be obtained electronically. If you do not receive the PIN within two weeks, contact the IRS to check the status.

4. Activate your account.

• • Once you receive the PIN, return to the EFTPS website.
  • Use the EIN, PIN and bank account information to activate your account.
  • Set up a password and security questions.

5. Schedule and make payments.

• • After activation, you can schedule payments online or by phone.
  • Payments must be scheduled at least one day in advance of the due date.
  • You can make estimated payments and balance-due payments through EFTPS.

What if I Haven’t Received My PIN and Need to Make a Payment?

If you need to schedule a payment before you receive your PIN, call 1.800.555.4477 two business days after completing enrollment. If the information provided matches IRS records, an agent can take your payment over the phone. For security reasons, the agent will not be able to provide your PIN over the phone.

Are Trusts and Estates Required to Make State Payments Electronically?

You will need to check individual state rules to determine which states require electronic payments. Pennsylvania requires that any payments of $15,000 and above must be made electronically. Making electronic payments in Pennsylvania is significantly easier than the EFTPS process for federal payments, so we recommend making payments electronically, even those less than $15,000. No sign-up or enrollment is required.

How to Make a Pennsylvania Payment Electronically

1. Gather the required information, listed below.

• • The trust’s or estate’s Employer Identification Number (EIN)
  • The name, address and phone number of the trust or estate
  • The bank account and routing number from which payments will be made

2. Schedule and make payments.

• • Go to https://mypath.pa.gov/.
  • Click on “Make a Payment” within the “Payments” box on the home screen.
  • Select “Make a Payment” on the next screen.
  • Enter the required information on the next screen (Account Type = Fiduciary, Payment Type, Tax Year, EIN, Trust/Estate Name, Address and Phone Number).
  • On the next screen, select either ACH Debit or Credit/Debit Card and enter relevant payment information.

The IRS has not announced any extensions or exceptions to the September 30, 2025, deadline. Trustees and administrators should act now to ensure compliance and avoid last-minute complications. Registering for EFTPS early is the best way to ensure timely tax payments for trusts and estates under the new electronic payment mandate.

Contact your RKL advisor if you have questions about how the new mandate may affect you.

 

*Requires the return to be eligible for electronic filing, and if setting up estimates to be directly withdrawn for the succeeding year, estimates cannot be modified once the return has been filed.

This is not an option for 2025 4^th quarter estimates due by January 15, 2026.