U.S. Treasury to Eliminate Paper Checks: What It Means for Tax Refunds, Social Security

Partial view of a USA Treasury Internal Revenue Service (IRS) tax refund check showing the Treasury seal and image of the Statue of Liberty. The check is between US currency ten and twenty dollar bills, which are visible in very small sections or in soft focus. Shot against a wood desk background. Treasury checks are also used to pay Social Security and Medicare benefits. Concept of government payments, refunds, subsidies, or welfare.

(Image credit: Getty Images)

published 31 March 2025

President Donald Trump recently signed an executive order calling on the federal government to phase out the use of paper checks and switch to electronic payments by September 30, with some limited exceptions.

The U.S. Treasury now has approximately six months to phase out paper checks for various purposes, including tax refunds and Social Security payments.

According to the White House, the Trump administration aims to “modernize how the government handles money, switching from old-fashioned paper-based payments to fast, secure electronic payments.”

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In other words, all government departments and agencies must issue disbursements via electronic funds transfer (EFT) methods, like direct deposit, debit/credit card payments, digital wallets, and real-time transfers.

Payments made to the federal government, like taxes, fees, fines, or loans, will also have to be made electronically, with limited exceptions.

As noted, exceptions are supposed to be made for individuals who don’t have access to banking services, or for certain special cases, such as emergency payments. Treasury Secretary Scott Bessent must provide an implementation plan for the measures within 180 days, according to Trump’s directive.

“Paper-based payments, such as checks and money orders, impose unnecessary costs, delays, and risks of fraud, lost payments, theft, and inefficiencies,” the White House order published March 25 stated. “Digital payments are more efficient, less costly, and less vulnerable to fraud.”

What does this mean for you? Here's more of what you need to know.

Related: Check out Kiplinger's tax blog for the 2025 filing season. We're providing live updates, news, information, and commentary to help you navigate your taxes.

The Treasury's elimination of paper checks for Social Security payments will require those receiving benefits by check to transition to electronic payment methods, like direct deposit or prepaid debit cards. Data show that more than 450,000 individuals receive paper Social Security checks.

This change could pose challenges, particularly for those older adults who are less familiar with digital banking systems.
Vulnerable populations, including those without reliable internet access, may also face difficulties adapting to the new system.
Though, as mentioned, the order provides for a process to be developed to address some cases of undue hardship.

Additionally, the transition could strain Social Security Administration resources as recipients seek assistance updating their payment information.

Many individuals who are unable to make changes online will require in-person support. That will be challenging, given the Trump administration's cuts to the federal agency, including the closure of many Social Security local offices.

We'll have to wait and see how the order is implemented and what types of safeguards and processes will be put in place to address these and other concerns.

Cracking down on mail theft

Notably, the Trump administration's move to phase out paper checks comes as more taxpayers have fallen victim to mail theft in recent years.

As reported by Kiplinger, last summer, two former postal workers were charged with stealing more than $4 million in U.S. Treasury checks at the John F. Kennedy International Airport between June 2021 and August 2023. The checks included Social Security benefits, pandemic stimulus checks, and tax refunds.

Mail theft cases like that are just the tip of the iceberg.

The FBI and United States Postal Inspection Service (USPIS) warned that check fraud is growing more common, particularly via mail theft. Cases involving fraudsters have nearly doubled from 2021 to 2023, harming businesses, consumers, and government entities.

The top five reasons you can fall victim to mail theft include the following:

1. Checks left in residential mailboxes overnight

2. Checks placed in blue collection boxes after the last pickup

3. Break-ins at USPS facilities

4. Postal service employees are getting robbed

5. Bribery and collusion of USPS employees

How bad has mail theft gotten? The U.S. Department of the Treasury’s Financial Crimes Enforcement Network (FinCEN) reported in September that mail theft-related check fraud totaled more than $688 million between February 2023 and August 2023.

FinCen’s analysis of the 15,417 reports related to check fraud identified three outcomes. Some 44% of stolen checks were altered and then deposited, 26% were used as templates for counterfeit checks, and 20% were fraudulently signed and deposited.

Lawmakers also tackle mail fraud

Last month, several bipartisan measures targeting taxpayer refunds, rights, and protections moved one step further on Capitol Hill.

As reported by Kiplinger, one piece of legislation specifically aims to reduce the risk of IRS tax refund mail theft by giving taxpayers the option to request a direct deposit if their check is stolen.

Congresswoman Nicole Malliotakis (R-NY) introduced a bipartisan measure, the Recovery of Stolen Checks Act, alongside Reps. David Kustoff (R-TN) and Terri Sewell (D-AL).

“Many of my constituents are hardworking taxpayers and when a check goes missing or is stolen, it directly impacts their livelihood,” said Malliotakis. “Having reissued payments delivered via direct deposit is a commonsense solution to this systematic and widespread problem, and will prevent criminals from preying on taxpayers and stealing their hard-earned money.”

Malliotakis’ district has faced a spike in mail fraud cases, with at least $5.3 million in checks stolen across 377 cases as of Feb. 12, 2025. Check amounts ranged from a few hundred dollars up to $500,000. One constituent had their check reissued four times until it was successfully received.

Tax refund check: What you can do today

With tax season underway, the best action you can take to minimize the risk of mail fraud is to file your tax return electronically and request direct deposit.

Taxpayers who file electronically can use the ‘Where’s My Refund’ tool to check the status of their tax refund within 24 hours of filing. If you’ve filed a paper return, you can track your refund within four weeks.

However, as of March 14, 2025, the IRS issued approximately 49.8 million tax refunds. Of these, approximately 1.5 million refunds were issued as paper checks, reflecting the difference between total refunds and direct deposits.

So, if you’re concerned that your refund is delayed or may have been stolen, you can also request a refund trace directly with the IRS via the ‘Where’s My Refund’ tool, by calling the agency’s automated system, or by contacting a customer service representative at 800-829-1040.

There’s one exception: Those filing jointly won’t be able to initiate a refund trace through the automated system and may be asked to complete a Form 3911, Taxpayer Statement Regarding Refund, to start the process.

Keep in mind that some federal refunds may take longer to process. You can refer to Kiplinger’s tax refund calendar to determine when you may expect your mailed check or direct deposit.

Additionally, if the tax refund or check you suspect was stolen, lost, or destroyed is from a state program, you should report your case to your State Comptroller’s Office.

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Gabriella Cruz-Martínez is a seasoned finance journalist with 8 years of experience covering consumer debt, economic policy, and tax. Before joining Kiplinger as a tax writer, her in-depth reporting and analysis were featured in Yahoo Finance. She contributed to national dialogues on fiscal responsibility, market trends and economic reforms involving family tax credits, housing accessibility, banking regulations, student loan debt, and inflation.

Gabriella’s work has also appeared in Money Magazine, The Hyde Park Herald, and the Journal Gazette & Times-Courier. As a reporter and journalist, she enjoys writing stories that empower people from diverse backgrounds about their finances no matter their stage in life.