In March 2025, a new Executive Order required all federal tax payments and refunds to be made electronically starting later this year. While the change is designed to increase efficiency, reduce fraud and facilitate quicker processing, it does change the way many of us pay our quarterly tax estimates, tax return payments and how we receive our tax refunds.
What Are the New Requirements and When Do They Go Into Effect?
- Effective date. The Executive Order is effective for tax refunds and payments as of Sept. 30, 2025. Please note, this will not impact individual estimated tax payments due Sept. 15, 2025. If you usually mail a check with the voucher, you can continue to do so for this quarter.
- All tax refunds will be issued electronically. You can no longer request that your tax refund be sent to you via check. All refunds will be made via direct deposit to the bank account information that you provide when filing your return.
- All tax return and quarterly estimated payments must be paid electronically. Mailing of tax return payment vouchers or quarterly estimated tax payment vouchers with checks will no longer be allowed. All payments must be made via electronic submission.
How does this impact me and how can I prepare for these changes?
Over the past several years, the IRS has increased the electronic payment mandate for many types of taxes, and this new Executive Order extends those mandates to individuals too. Fortunately, the IRS provides multiple options for you to securely process the required electronic transactions.
Receiving electronic tax refunds. Whether working with a tax professional to file your tax return or preparing your tax return yourself using an online tax software program, you have likely seen the option to provide or input your bank information to receive a direct deposit of your tax refund. Alternatively, you have the option to receive your refund by check via mail. Under the new policy, you will have to provide your bank information to receive your refund via direct deposit only.
Estimated tax payments and tax return payments. If you are currently mailing in your quarterly estimated tax payment vouchers or tax return payments with a check, you will need to start making those payments electronically after Sept. 30, 2025. As noted above, third-quarter individual estimated tax payments can still be paid via check and mailed to the IRS since they are due on Sept. 15, 2025. The IRS provides several options for making payments:
- No account set-up needed:
- Direct Pay from your bank account
- Debit card, credit card or digital wallet (fees will apply)
- Account set-up required:
- Individual Online Account (uses ID.me verification)
- EFTPS – Electronic Federal Tax Payment System (new accounts can take up to five business dates to process)
- Electronic Funds Transfer (EFT) via tax software program. You may already be making your tax return payments through your tax software program when filing your return by providing or inputting your bank information. Some programs may allow you to schedule your estimated payments in advance too. Please check with your tax professional or online tax software support to see the options available to you.
We expect that additional guidance on the new electronic payment and refund mandate will be provided as the implementation date gets closer. Additionally, there may be some exceptions to these new requirements. For state payment related rules, please see your particular state’s Department of Revenue website for additional guidance. This Executive Order applies to federal tax payments only. As always, your Grimes advisor is here to help if you have questions on implementing the new requirements.
Important Disclosures:
Please remember that past performance is no guarantee of future results. Different types of investments involve varying degrees of risk, and there can be no assurance that the future performance of any specific investment, investment strategy, or product (including the investments and/or investment strategies recommended or undertaken by Grimes & Company Wealth Management, LLC (d/b/a Grimes & Company), or any non-investment related content, made reference to directly or indirectly in this blog will be profitable, equal any corresponding indicated historical performance level(s), be suitable for your portfolio or individual situation, or prove successful. Due to various factors, including changing market conditions and/or applicable laws, the content may no longer be reflective of current opinions or positions. Moreover, you should not assume that any discussion or information contained in this blog serves as the receipt of, or as a substitute for, personalized investment advice from Grimes. To the extent that a reader has any questions regarding the applicability of any specific issue discussed above to his/her individual situation, he/she is encouraged to consult with the professional advisor of his/her choosing. No amount of prior experience or success should be construed that a certain level of results or satisfaction will be achieved if Grimes is engaged, or continues to be engaged, to provide investment advisory services. Grimes is neither a law firm nor a certified public accounting firm and no portion of the blog content should be construed as legal or accounting advice. A copy of the Grimes’ current written disclosure Brochure discussing our advisory services and fees is available for review upon request or at https://www.grimesco.com/form-crs-adv/. Please Note: Grimes does not make any representations or warranties as to the accuracy, timeliness, suitability, completeness, or relevance of any information prepared by any unaffiliated third party, whether linked to Grimes’ web site or blog or incorporated herein, and takes no responsibility for any such content. All such information is provided solely for convenience purposes only and all users thereof should be guided accordingly. Please Remember: If you are a Grimes client, please contact Grimes, in writing, if there are any changes in your personal/financial situation or investment objectives for the purpose of reviewing/evaluating/revising our previous recommendations and/or services, or if you would like to impose, add, or to modify any reasonable restrictions to our investment advisory services. Unless, and until, you notify us, in writing, to the contrary, we shall continue to provide services as we do currently. Please Also Remember to advise us if you have not been receiving account statements (at least quarterly) from the account custodian.
