Paper checks for tax reimbursements, social security payments and other government benefits have decreased and will soon be eliminated, which may affect hundreds of thousands of Americans.
On March 25, President Trump signed an executive regulation in which the Federal Government hired the exhibition of paper checks on September 30. Instead, government agencies must electronically make payments electronically by direct deposit on a bank account, a debit card or digital wallet.
“This executive regulation will defend itself against financial fraud and improper payments, increase efficiency, reduce costs and improve the security of federal payments,” said a spokeswoman for the White House, Liz Huston, in an e -mail declaration.
Most monthly social security payments and annual tax returns are already paid by direct deposits, as the agency's statistics show. But the government said that it was still paper to modernize the way the government dealt with money. In a fact sheet about the order it says that the government aimed to switch “from old -fashioned paper payments to fast, safe electronic payments”.
The order only gives the finance department six months to carry out the mandate – “a very aggressive time frame,” said Steve Kennally, Senior Vice President of Payments at the American Bankers Association, in a podcast by ABA Banking Journal. The order is still “welcome,” said the association because electronic payments for consumers and government are “much faster, cheaper and safer”.
The finance department did not answer a request for a comment.
Jennifer Terscher, Managing Director of the Financial Health Network, said it was the right thing to eliminate paper tests, but “Consumer awareness and help with the shift help to request the change smoothly.
“It's all in the execution,” she said.
The Weißen House fact sheet said that the government had planned a campaign to raise awareness of public awareness in order to inform the federal payer's payer's payer and offer instructions.
Kathleen Romig, director of social security and disability guidelines in the center for budget and political priorities, said that she agreed that the direct deposit is a “proven practice” for secure payments. However, she said that newly announced review requirements for the creation of online accounts for social security could mean that more people need government aid to set up payments.
This could be a challenge since federal authorities such as the social security authority and the Internal Revenue Service are exposed to considerable employee cuts as part of the Trump administration.
How many paper controls are issued by the government?
The use of paper controls by the government has long since decreased due to various federal efforts and the development of payment technology. In an initiative, which is known as EFT '99, the government tried to make most of the federal payments as tax reimbursements. However, the efforts confronted resistance, said Kennally in the podcast, often from members of the congress who received complaints from member groups, preferred paper controls.
Over time, however, the dependence on paper checks has fallen. According to the recent statistics of social security management, more than 99 percent of the approximately 69 million monthly payments for social security are made by direct deposit. The beneficiaries must already receive electronic payments, except under “rare” circumstances, such as
“The government is mostly out of the check business,” said Ms. Tescher.
Nevertheless, around 486,000 checks for social security are interpreted every month. Another 238,000 paper controls are sent to recipients of additional security revenue every month who are available with low incomes that are blind or disabled.
Leland Dudek, the incumbent commissioner for social security, said in an e -mail declaration: “We support this executive regulation and will comply with.”
How many people do tax reimbursements receive from paper check?
The majority of reimbursements of the federal income tax are sent by direct deposit. By March 21, the IRS had issued around 55.7 million reimbursements for 2024 tax returns, of which around 1.9 million or about 3.5 percent were paper controls. (It is not expected that the president's order will affect reimbursements for the tax season of this spring, which the deadline for most filers approaches on April 15, an IRS spokesman said.)
The financial department recently took other steps to reduce paper, including the elimination of the option of using tax reimbursements to buy the paper version of I bonds, federal savings bonds protecting them from inflation.
Are paper tests less safe?
While some people still prefer paper, checks can go wrong by post and are increasingly being subject to fraud. They can be stolen from mailboxes and redeemed by someone who is signed. In a scheme, stolen paper tests with chemicals are “washed” to remove the name of the recipient and the amount of the check. The thief then inserts its own name and a larger dollar amount. Last summer, two former Post Service employees were charged with fees that they were stolen and sold to others by a post office at Kennedy Airport in New York in New York in New York.
What if I don't have a bank account?
In the president's appointment, it was determined that “limited exceptions” were made, such as “for people without banking or electronic payment access”.
“We have to see how the exceptions develop,” said Lauren Saunders, deputy director of the National Consumer Law Center.
The number of Americans who are “non-tied” or have no access to a traditional check or savings account has dropped in recent years. According to the Federal Deposit Insurance Corporation in 2023, a little more than 4 percent of households from around 8 percent in 2011 were not connected.
One reason for the decline is that people can now find low-fairy bank accounts through the bank on Program on Program, which are operated by the non-profit cities for Financial Empowerment Fund, said Ms. Tescher. The program works nationally with banks to certify thousands of safe, inexpensive accounts. You can search online to find one that corresponds to Bank on the bank.
And Ms. Saunders found that people without formal bank accounts could already receive federal payments through the Direct Express program through which the government puts payments on a prepaid debit card and enables recipients of social security, disability or veterans to withdraw cash or payment calculations.
Direct Express serves around 3.4 million people, most of whom have no bank accounts. The long -standing administrator was recently examined for bad customer service, and a new bank, the Bank of New York Mellon Corporation, will begin this year.
Does the order affect payments to the government?
The executive regulation also requires that payments to the government – e.g. B. for income taxes and pass applications – also electronic and not through physical review.