The U.S. Treasury and Internal Revenue Service (IRS) have announced a major change: under Executive Order 14247, all federal tax payments and disbursements – including those made by trusts – must be made electronically starting September 30, 2025.
Paper checks will no longer be accepted for most federal tax payments after this date, with very limited exceptions. This change is part of a broader government initiative to modernize and secure payment systems, and it will affect all taxpayers, including trusts that have traditionally paid by check or received refund checks by mail.
What You Need to Know
- Paper checks will no longer be accepted by the IRS for most federal tax payments after 9/30/25.
- Refunds will be issued electronically, typically via direct deposit to a linked bank or brokerage account.
- Trusts without a checking account or electronic payment method in place may face delays or penalties if they are not prepared.
Recommended Action Steps
1. Ensure Your Trust Account Can Make Electronic Payments:
- If your trust does not currently maintain a checking account:
- Consider opening a trust checking account, OR
- Enabling automated clearing house (ACH) debit (electronic withdrawal) capability on an existing brokerage or investment account.
- This is crucial not only for paying taxes electronically, but also for receiving IRS refunds via direct deposit – traditional refund checks sent by mail will no longer be issued once the rule is in effect.
2. Enroll in EFTPS (Electronic Federal Tax Payment System):
- EFTPS is the IRS’s preferred method for electronic tax payments. It is secure, free, and allows payments to be scheduled up to a year in advance.
- Trusts must enroll at eftps.gov. The process takes about a week, as a PIN will be mailed to the trust’s address of record.
- You’ll need the trust’s employer identification number (EIN) and the account information for the linked checking or brokerage account.
Alternative Payment Method
In addition to EFTPS, trusts may pay taxes via ACH electronic funds withdrawal when e-filing. IRS Direct Pay is not currently available for trust returns.
Benefits of Early Compliance
- Avoid Penalties and Delays: Late or rejected payments due to noncompliance could result in interest or penalties.
- Track and Confirm Payments: EFTPS provides immediate confirmation and payment history for your records.
- Faster Refunds: Electronic refunds are processed more quickly and securely than mailed checks.
We’re Here to Help
We will continue to monitor IRS guidance and provide updates as more details become available regarding exceptions and transitional relief. Taking action now will help keep your trust compliant with the new federal mandate and avoid disruptions.
Wolf’s team can guide you through the transition process, address compliance requirements, and support you in meeting the deadline. Contact us today to learn how we can assist you.
