by Laura P., writing for the School of ACE Blog
If you receive a paper check for your federal tax refund or U.S. government benefits, 2025 could be your last year to do so.
President Trump signed an Executive Order on March 25 declaring that the federal government will no longer produce paper checks, transitioning instead to electronic funds transfer (EFT) methods like direct deposit effective September 30, 2025. Titled “Modernizing Payments to and from America’s Bank Account,” the Executive Order states that the primary reason for the change is “… to defend against financial fraud and improper payments, increase efficiency, reduce costs, and enhance the security of Federal payments.”
Why does this Executive Order that phases out paper checks matter?
Once the Executive Order goes into effect, all U.S. government benefit payments and tax refunds will process with EFT methods like direct deposit, prepaid card accounts, and other digital payment options. If you currently receive your federal benefits payments by paper check, you should make sure that you are set up to receive those funds electronically.
Don’t let the government decide where your money goes – take action to set up Direct Deposit now.
All payments to the federal government for taxes, fines, fees, etc. will also be processed electronically.
What are some examples of federal government payments by paper check?
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Tax refunds
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Social Security benefit payments (for retirement, disability, and survivors)
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Supplemental Security Income (SSI) payments
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Veterans Affairs benefit payments (for disability, pension, and educational assistance)
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Federal employee retirement payments
Who will this Executive Order about paper checks affect the most?
Those who receive federal tax refunds and benefits from the Social Security Administration (SSA) are most impacted by the Executive Order, followed by veterans and federal retirees.
Top three most affected groups by the numbers:
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The IRS paid 9,865,000 tax refunds by paper check out of 104,886,000 (9.4%) during the 2024 calendar year.
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As of April 2025, the SSA reports that 485,766 out of 68,589,950 beneficiaries (0.7%) still receive paper checks.
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237,668 out of 7,456,185 SSI recipients (3.2%) receive their payments by paper checks as of April 2025.
As of the latest information available, the total number of people impacted from these three groups is approximately 10,588,434.
How is the U.S. government letting people know about the Executive Order
While the U.S. Treasury Department promises to coordinate a “comprehensive public awareness campaign” to help federal government payment recipients access and set up digital payment options, we at ACE encourage you not to wait for them to contact you. We’re here to help you right now with setting up Direct Deposit so you know you will continue to receive your payments, just by a different method.
What Are the Advantages of Direct Deposit over Paper Checks?
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You save on check cashing fees. With Direct Deposit, there’s no fee to receive the money into your account, while most businesses that offer check cashing services charge fees.
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Direct Deposit is safer than a paper check. Paper checks can get lost in the mail, stolen, or misplaced, while Direct Deposits are transferred to your account securely and reliably.
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You get your money faster than a paper check.* A direct deposited government payment shows up quickly in your account – sometimes up to two days faster than a paper check. Plus, you don’t have to leave your home or wait in a line to get access to your funds!
*Based on a comparison of Direct Deposit to a mailed paper check.
You’re a check cashing business! Why should I trust ACE with Direct Deposit?
While ACE does offer check cashing as a service, ACE also has other financial products and services such as short-term consumer loans, card services, money transfers, bill pay, and money orders. We’ve been in business since 1968, and our associates deliver exceptional customer service.
As of March 2025, ACE has a 4.9-star rating on Google with over 300,000 customer reviews.
And many of our customers mention the convenience and ease of setting up Direct Deposit at our stores when they review us. Here’s what they had to say in some recent five-star reviews:
“Cindy and Melissa did a great job helping me set up Direct Deposit. It’s much more convenient!” (see all reviews for this store)
Howard M., Colorado Springs, CO – 4/2/2025
“I want to thank Adriana. She helped me set up Direct Deposit. It’s a very easy process.” (see all reviews for this store)
Mercedes H., Long Beach, CA – 4/1/2025
“Thank you, Cristal, for the great service and for saving me money with my Direct Deposit sign up.” (see all reviews for this store)
Maria J., McAllen, TX – 2/4/2025
“Cindy is an example of exemplary customer service, patience, guidance and customer knowledge. I signed up for Direct Deposit, as I feel very comfortable using their services.” (see all reviews for this store)
Richard J., Saint Charles, MO – 1/17/2025
“I get paid faster with ACE. Thank you, Chandra, for all of the information and for setting me up with Direct Deposit.” (see all reviews for this store)
Barbara K., Dallas, TX – 1/14/2025
You can see ratings of an ACE store near you by choosing a store from the results and then selecting the “Reviews” tab.
Stop by an ACE store today, and an associate will be glad to recommend products and services best suited to your financial needs.
Are there any exceptions to this Executive Order?
According to a White House Fact Sheet released immediately following the Executive Order, “Exceptions will be made for people without banking or electronic payment access, certain emergency payments, certain law enforcement activities, and other special cases qualifying for an exception under the Order or other existing law.”
The Executive Order doesn’t explicitly outline how the federal government will identify and assist those in unbanked households (5.6 million American households, or 4.2%, in 2023) who might qualify for an exception.
Frequently Asked Questions
1. What is a paper check and why is it being phased out?
A paper check is a printed document used to make payments. Due to issues with inefficiency, security, waste, fraud, and abuse, the U.S. government is transitioning to digital methods like Direct Deposit to make and receive payments.
2. What if I don’t have an account for Direct Deposit?
You can set up a Direct Deposit account yourself or go into an ACE store, and an associate will assist you with opening one.
3. How do I switch from receiving a paper check to using Direct Deposit?
Provide your Direct Deposit account number and routing information to the agency issuing your benefits (e.g., Social Security Administration, Treasury Department, Veterans Affairs). Visit any ACE store, and an ACE associate can explain the process to you.
4. Is Direct Deposit safer than a paper check?
Yes. It reduces the risk of theft or loss and ensures faster, more reliable access to funds. Saving on check cashing fees is an added bonus!
If you’ve been receiving paper checks from the federal government for benefits and/or tax refunds, it’s time to make a choice about how to receive those funds electronically. If you still have questions, ACE associates are here to help you set up Direct Deposit. We’ll get you ready for what’s next!
This blog is not intended to provide any tax, legal, financial planning, insurance, accounting, investment, or any other kind of professional advice or services. To make sure that any information or suggestions in this blog fit your particular circumstances, you should consult with an appropriate tax or legal professional before taking action based on any suggestions or information that we provide.
Bibliography:
Erb, Kelly Phillips (2025, March 28). Next Up for Social Security and the IRS: No More Paper Checks. Forbes. https://www.forbes.com/sites/kellyphillipserb/2025/03/28/next-up-for-social-security-and-the-irs-no-more-paper-checks/.
Federal Deposit Insurance Corporation (Nov. 2024). 2023 FDIC National Survey of Unbanked and Underbanked Households. FDIC. https://www.fdic.gov/household-survey.
Social Security Administration (April 2025). Social Security Administration Beneficiaries Social Security Direct Deposit and Check Statistics. SSA. https://www.ssa.gov/deposit/GIS/data/Reports/T2StateSum.htm.
Social Security Administration (April 2025). Social Security Administration Beneficiaries Supplemental Security Income Direct Deposit and Check Statistics. SSA. https://www.ssa.gov/deposit/GIS/data/Reports/T16StateSum.htm.
Trump, President Donald J. (2025, March 26). Executive Order: Modernizing Payments to and from America’s Bank Account. The White House. https://www.whitehouse.gov/presidential-actions/2025/03/modernizing-payments-to-and-from-americas-bank-account/.
The White House (2025, March 26). Fact Sheet: President Donald J. Trump Modernizes Payments to and from America’s Bank Account. The White House. https://www.whitehouse.gov/fact-sheets/2025/03/fact-sheet-president-donald-j-trump-modernizes-payments-to-and-from-americas-bank-account/
