The federal government is moving federal tax payments to electronic methods for the 2026 tax year. Under Executive Order 14247, signed March 25, 2025, the U.S. Treasury and the IRS are phasing out paper checks and asking taxpayers to pay electronically as soon as practicable. Treasury stopped issuing most paper refund checks after September 30, 2025, and the agency now urges individuals, businesses, trusts, and estates to set up an approved electronic payment option. Taxpayers who delay risk missing deadlines, incurring penalties, and facing unnecessary processing delays.
This article answers one central question: how should you pay the IRS as the system shifts to electronic payments? Below is a complete breakdown of what changed, which IRS electronic payment method applies to your situation, and the steps you should take to stay compliant.
Why the IRS Is Phasing Out Paper Checks in 2026
The push toward an all-electronic payment system aims to solve three persistent problems: slow processing times, security vulnerabilities, and high administrative costs. Paper checks routinely took weeks to clear, created opportunities for fraud and theft in the mail, and required significant manual labor to process.
By moving to electronic payment, the IRS expects faster posting of payments to taxpayer accounts, stronger security through encrypted digital transactions, and lower operating costs that help the agency process returns more efficiently. For taxpayers, this means payments are confirmed almost instantly rather than floating in the mail for days or weeks.
It is worth being precise about what changed. According to the IRS guidance on Executive Order 14247, Treasury has stopped issuing most paper refund checks, and the order directs taxpayers to pay the IRS electronically as soon as practicable. For now, the IRS has said checks and money orders are still accepted, and limited exceptions remain for hardship or specific legal and procedural situations. The clear direction, though, is electronic, so the practical move for nearly every taxpayer is to set up a digital payment method before the next deadline.
The change also aligns federal tax payments with the direction most financial institutions and government agencies have already taken. Social Security payments, federal employee salaries, and most state tax systems already operate electronically. The IRS is now matching that standard for its own collections.
This transition affects recordkeeping and cash-flow planning across nearly every type of organization. Companies that previously cut checks at the last minute now need confirmed electronic payment processes in place. If your internal accounting workflow still assumes a paper check option, our client accounting services team can help you rebuild that process around electronic payments.
How Individual Taxpayers Should Pay Using IRS Direct Pay
Individual taxpayers should use IRS Direct Pay, the agency’s free online portal for making federal tax payments directly from a checking or savings account. IRS Direct Pay does not charge any fees, and taxpayers do not need to create an account or enroll in advance to use it.
To make a payment through IRS Direct Pay, visit the IRS website and select the type of tax payment you need to make, such as an estimated tax payment, an extension payment, or a balance due on a filed return. You then enter your bank account and routing number, verify your identity, and submit the payment. The system provides immediate confirmation that your payment has been received.
IRS Direct Pay is available 24 hours a day, seven days a week, and processes payments on the same business day if submitted before the daily cutoff. Taxpayers can also schedule payments in advance, which is especially useful for quarterly estimated tax payments. This IRS payment option is the simplest path for most individuals.
For taxpayers who want a single dashboard that shows balances, payment history, and notices, the IRS Online Account adds another option. It lets you view what you owe, see prior payments, and make a payment from a linked bank account. Many individuals pair Direct Pay for quick payments with an Online Account for ongoing visibility.
EFTPS Enrollment: What Businesses Must Do Now
Businesses, including S-corporations, C-corporations, and partnerships, should use the Electronic Federal Tax Payment System (EFTPS) for federal tax payments, and it is the standard channel for business deposits and liabilities. Unlike IRS Direct Pay, EFTPS requires advance enrollment, and the process takes time to complete.
After you submit your EFTPS enrollment online, the IRS mails a Personal Identification Number (PIN) to the business address on file with the agency. EFTPS states this mailing arrives in about five to seven business days under normal circumstances. During peak filing periods, such as January through April, the wait can stretch longer, so do not assume the PIN will arrive overnight.
Once you receive your PIN, you can log into EFTPS and begin scheduling payments. The system handles income taxes, payroll taxes, excise taxes, and other federal obligations. You can schedule business payments well in advance, and each transaction generates a confirmation number for your records.
The critical point for business owners is timing. If you wait until a tax deadline is approaching to begin EFTPS enrollment, you may not receive your PIN in time to make a timely payment. Late payments result in penalties and interest, even if the delay was caused by the enrollment process. The IRS does not waive penalties because a taxpayer failed to enroll early enough.
Payroll tax deposits deserve particular attention because they fall on a strict schedule and carry steep penalties for late deposits. Businesses with employees should confirm their EFTPS access well before the next deposit due date. Our tax advisory services team works with companies to map out payment deadlines and verify that the right people hold EFTPS access before a deposit comes due.
How Trusts and Estates Pay Federal Taxes Electronically
Trusts and estates face the same IRS electronic payment requirement as businesses: they must use EFTPS. Fiduciaries managing trusts and personal representatives handling estates need to enroll the entity in EFTPS using the entity’s Employer Identification Number (EIN).
The enrollment process mirrors the business process. Submit the enrollment form online, wait for the PIN to arrive by mail, and then use the PIN to access the system and schedule payments. Because estate tax deadlines can arrive quickly, particularly when a final return is due within nine months of a decedent’s death, early EFTPS enrollment is essential.
Fiduciaries should also be aware that the person authorized to make payments through EFTPS must be listed as an authorized representative. If responsibilities change, such as when a successor trustee takes over, the EFTPS enrollment may need to be updated to reflect the new authorized individual.
Entities that file fiduciary income tax returns should not assume their tax preparer will handle the mechanics of payment automatically. Confirm in advance who submits payments and from which account, so a return and its corresponding payment do not fall out of sync near a deadline.
Penalties for Late IRS Electronic Payments
Missing a federal tax payment deadline carries real financial consequences, regardless of the reason. The IRS charges a failure-to-pay penalty of 0.5% of the unpaid tax for each month or partial month the payment is late, up to a maximum of 25%. Interest also accrues on the unpaid balance, compounded daily, at the federal short-term rate plus three percentage points.
These penalties apply even when a taxpayer intended to pay on time but could not because they had not set up their digital payment method with the IRS. The transition to electronic payment does not extend any filing or payment deadlines, and it does not create an exception for taxpayers who were unaware of the change.
The interest rate the IRS charges can change quarterly because it is tied to the federal short-term rate. That makes prompt payment even more valuable, since a balance left unpaid through a rate increase costs more over time. Setting up your payment method now removes the most avoidable cause of these charges.
The best way to avoid these costs is straightforward: set up your electronic payment method well before any deadline arrives. For individuals, that means testing IRS Direct Pay with a small payment. For businesses, trusts, and estates, that means completing EFTPS enrollment immediately.
Steps to Take Right Now to Prepare
Preparing for the IRS electronic payment requirement takes only a few minutes for individuals and slightly longer for businesses and fiduciary entities. Here is what to do based on your situation:
Individuals: Visit the IRS Direct Pay page on irs.gov and familiarize yourself with the interface. No enrollment is needed, but having your bank account information and most recent tax return handy will speed up the process when you need to make a payment.
Businesses: Go to eftps.gov and complete the enrollment form. You will need your EIN, business bank account number, and routing number. Plan for about five to seven business days, and potentially longer in peak season, to receive your PIN by mail.
Trusts and estates: Enroll in EFTPS using the entity’s EIN. If you manage multiple entities, each one requires its own separate enrollment.
All taxpayers: Update any internal processes or instructions you use for making tax payments. If you work with a CPA or tax advisor, confirm that your payment method is set up and ready to use before the next deadline. Pease Bell CPAs offers a full range of accounting services to help you align payment processes with each filing obligation.
Frequently Asked Questions
How do I pay the IRS electronically as an individual?
Individual taxpayers can use IRS Direct Pay at irs.gov to make federal tax payments directly from a bank account at no cost. No advance registration is required: you enter your payment details, verify your identity, and submit. Payments are confirmed immediately and processed on the same business day when submitted before the cutoff.
What is EFTPS and who needs to enroll?
The Electronic Federal Tax Payment System (EFTPS) is the IRS platform that businesses, trusts, and estates use to make federal tax payments electronically. Enrollment is required before you can use it, and the IRS mails a PIN to your address on file, which EFTPS says typically takes about five to seven business days to arrive.
Does IRS Direct Pay charge any fees?
No. IRS Direct Pay is free for individual taxpayers. There are no transaction fees, processing charges, or hidden costs. Payments are debited directly from your checking or savings account.
What happens if I miss a tax payment because I was not set up for electronic payment?
The IRS charges a failure-to-pay penalty of 0.5% per month on the unpaid balance, up to a maximum of 25%, plus daily interest. The agency does not waive penalties because a taxpayer had not enrolled in EFTPS or was unaware of the shift toward electronic payment. Setting up your payment method early is the only way to avoid this risk.
Can I still pay the IRS with a credit or debit card?
Yes. Credit and debit card payments remain available through approved third-party payment processors. These processors charge convenience fees, so bank account payments through IRS Direct Pay or EFTPS are more cost-effective for most taxpayers. The IRS is steering taxpayers toward electronic options, so a fee-free bank payment is usually the better choice over card or check.
How far in advance can I schedule an IRS electronic payment?
Through IRS Direct Pay, individual taxpayers can schedule payments ahead of the due date, while businesses using EFTPS can schedule payments much further in advance. Scheduling payments early is especially useful for quarterly estimated tax obligations, helping ensure you never miss a deadline.
