ELECTRONIC PAYMENTS TO/FROM FEDERAL GOVERNMENT

The Internal Revenue Service (“IRS”) has released guidance to assist taxpayers and businesses to understand changes under “Executive Order 14247: Modernizing Payment To and From America’s Bank Account.”

The U.S. Department of the Treasury, in collaboration with the IRS and other federal agencies, is transitioning federal payments to and from the government to electronic methods.

These changes apply to:

• Payments sent by the federal government, including tax refunds, benefits, grants, and vendor or contractor payments; and
• Payments made to the federal government, including tax balances due, fees, penalties, and other payments from individuals, businesses, nonprofit organizations, and state or local partners.

The Executive Order does not change how taxpayers file their tax returns. Taxpayers will continue to file their returns in the same manner as they have in the past. The change affects how refunds are issued and how payments are made, not how returns are prepared or submitted, beginning with the 2026 filing season. For now, checks and money orders will still be accepted.

The IRS encourages taxpayers to:

• Use direct deposit for refunds by providing accurate bank or prepaid debit card information when filing.
• Choose electronic payment options when paying taxes, such as IRS Direct Pay, Electronic Federal Tax Payment System, or other approved methods.
• Review account information to ensure bank details are current and correct.
• Visit IRS.gov to learn about electronic payment options and available resources for taxpayers without a bank account.

More information is available here and here.  Do not hesitate to contact us if you need any assistance.

 

IRS OPENS 2026 FILING SEASON

The Internal Revenue Service opened the 2026 tax filing season on January 26, 2026, and began accepting and processing federal individual income tax returns for tax year 2025.

The IRS expects about 164 million individual tax returns for tax year 2025 to be filed ahead of the Wednesday, April 15, federal deadline. Taxpayers can find a range of tools and filing options on IRS.gov to help them prepare and file their returns.

 

IRS RELEASES ADDITIONAL INFORMATION REGARDING THE NEW DEDUCTION FOR OVERTIME COMPENSATION

The Department of the Treasury and the Internal Revenue Service today issued frequently asked questions in the Fact Sheet related to the new deduction for qualified overtime compensation under the One, Big, Beautiful Bill.

For tax years 2025 through 2028, individuals who receive qualified overtime compensation may deduct the amount that exceeds their regular rate of pay (generally, the “half” portion of “time-and-a-half” compensation) and is reported on a Form W-2 or Form 1099.

These FAQs contain additional information about the deduction, provide resources for employees (including federal employees) to assist them in determining whether they received qualified overtime compensation under the Fair Labor Standards Act, and contain useful information regarding the differences in reporting requirements for tax year 2025 and 2026-2028.