Mandatory Federal Electronic Payments to Begin September 30, 2025
On March 25, 2025, President Trump signed an executive order, Modernizing Payments To and From America’s Bank Account, mandating the transition to electronic payments for all federal disbursements and receipts by September 30, 2025. Payments, such as fees, fines, loans and taxes, must be made via electronic funds transfer (EFT). Accepted electronic payment methods include direct deposit, debit and credit cards, Electronic Federal Tax Payment System (EFTPS), digital wallets and real-time payment systems. According to the executive order, this change aims to eliminate inefficiencies, reduce costs and enhance payment security.
Are There Any Exceptions?
While modernization and stronger security are necessary, the executive order recognizes that exceptions will sometimes be required. The Secretary of Treasury may grant exceptions for the following:
- Individuals without access to banking services or electronic payment systems
- Emergency payments where electronic disbursement would cause undue hardship
- National security or law enforcement-related activities where non-EFT transactions are necessary or preferred
- Other circumstances as deemed necessary by the Secretary
What’s Next?
The executive order will affect taxpayers in several ways, most notably by eventually requiring them to use an EFT system for both making payments to and receiving payments from the Federal government. Taxpayers are encouraged to prepare for the transition ahead of the October 15 extended return filing deadline.
Brown Plus will keep clients informed once the final guidance is released. If you have any questions regarding the mandatory federal electronic payments, please contact a member of our Brown Plus Tax Department.