Feds Ditch Paper Checks: Electronic Money for All Agencies
Published Date: 4/29/2026
Proposed Rule
Summary
The government is saying goodbye to paper checks and moving to electronic payments for almost all federal money sent out. This change affects federal agencies and anyone who gets paid by the government, making payments faster and safer. Comments on this plan are open until June 15, 2026, so speak up if you have thoughts!
Analyzed Economic Effects
8 provisions identified: 5 benefits, 3 costs, 0 mixed.
Federal payments move to electronic-only
Treasury proposes that, except for payments under the Internal Revenue Code of 1986, all Federal payments be made by electronic funds transfer (EFT) rather than by paper check. The proposal notes that about 97% of the more than 1.3 billion payments Treasury disburses each year are already electronic, but in fiscal year 2025 Treasury still printed 40.9 million checks and reports printing costs averaging $3.07 per check.
Individual hardship waivers handled by agencies
Under the proposal, individuals seeking a hardship waiver to receive a paper check must submit that request to the paying Federal agency, not to Treasury. Agencies will adjudicate hardship waivers in a form and manner determined by the agency pursuant to Treasury guidance.
Checks allowed for Indian land lacking infrastructure
The rule would permit agencies, without prior Treasury approval, to issue paper checks for payments made to individuals or entities located on Indian land that lack the infrastructure to support electronic funds transfers.
Agencies must confirm exceptions and report waivers
Agencies must confirm that an applicable waiver applies before authorizing a paper check, and Treasury may require agencies to report on compliance, including waiver requests the agency has approved and rejected. The rule also requires an agency Certifying Officer to ensure an applicable waiver exists before certifying a paper disbursement; Treasury may assess a charge to an agency if a payment is not made by EFT as prescribed under the part, pursuant to 31 U.S.C. 3335.
More electronic payment methods accepted
The proposed regulation updates the definition of electronic funds transfer to add transfers made by "instant payment networks" and explicitly notes payments may be made to accounts that meet 31 CFR part 210 requirements, including certain prepaid debit cards and digital wallets.
One-time and small-business check waiver now needs approval
The proposal would require an agency to request Treasury approval before issuing paper checks for non-regular, non-recurring payments to individuals or small business concerns; this waiver previously could be used by agencies without prior Treasury approval.
Elimination of very-old age-based check waiver
The proposed rule removes the individual waiver that applied to people "born prior to May 1, 1921" who were receiving payment by check on March 1, 2013. Treasury notes that the waiver is narrowly applicable because those individuals would now be over 104 years old.
Treasury may deliver tax payments to sponsored accounts
The proposed revision clarifies that Treasury's authority to deliver payments to Treasury-sponsored accounts extends not only to Federal payments within part 208 but also to payments made under the Internal Revenue Code of 1986.
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Key Dates
Department and Agencies
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