Global Mobility Tax

United States | Executive Order: modernizing payments to and from America’s bank account

Summary

On March 25, 2025, President Trump signed an Executive Order to modernize how the government handles money—switching from paper-based payment to electronic payment.

The detail

The Order mandates that effective September 30, 2025, the federal government will cease issuing paper checks for any disbursements, including tax refunds. Additionally, payments made to the federal government must also be processed electronically. While it does state that exceptions may be made for people without banking or electronic payment access – it is yet to be seen how these exceptions will apply.

The order outlines several reasons for the change including:

• Defending against fraud—paper checks are more prone to fraud, more likely to be lost, stolen, or altered
• Create efficiencies in the government—the federal government is no longer required to maintain the physical infrastructure for digitizing paper records (can phase it out)
• Digital payments are more efficient, less costly and less vulnerable to fraud
• “Government needs to catch up with the technology revolution”

This change is especially relevant for companies with globally mobile and tax equalized employees, many of whom have processes in place to fund tax payments and receive tax refunds directly on behalf of their employees, generally involving the use of paper checks. Many of these companies will need to update their policies and procedures for tax payment and reimbursement, and communications to employees regarding maintaining US bank accounts.

Even after updating processes, further complications must be considered, including:

• IRS direct deposit limitations
• Employees who no longer have access to a US bank account – while other payment options may be available for individuals with no US bank account, additional fees may apply

How we can help

We’re here to help you evaluate and implement strategies in response to this policy change. Companies with globally and domestically mobile populations face unique risks and challenges within our regulatory environment. We are also available to assist with any questions about your US citizen employees working abroad, non-US employees working in the United States, as well as your domestically mobile population.

Contact us

For a deeper discussion on the above, please reach out to your Vialto Partners point of contact, or alternatively:

David Austin
Partner

Mike Branca
Partner

Julie Baron
Partner

 

Want to know when a Regional Alert is posted?

Simply follow our Vialto Alerts page on LinkedIn and posts will be displayed on your feed. To ensure you don’t miss one, once you’re on our LinkedIn page, click on the bell icon under the banner image to manage your notifications.

Further information on Vialto Partners can be found here: www.vialtopartners.com

Vialto Partners (“Vialto”) refers to wholly owned subsidiaries of CD&R Galaxy UK OpCo Limited as well as the other members of the Vialto Partners global network. The information contained in this document is for general guidance on matters of interest only. Vialto is not responsible for any errors or omissions, or for the results obtained from the use of this information. All information is provided “as is”, with no guarantee of completeness, accuracy, timeliness or of the results obtained from the use of this information, and without warranty of any kind, express or implied, including, but not limited to warranties of performance, merchantability and fitness for a particular purpose. In no event will Vialto, its related entities, or the agents or employees thereof be liable to you or anyone else for any decision made or action taken in reliance on the information in this document or for any consequential, special or similar damages, even if advised of the possibility of such damages.

© 2025 Vialto Partners. All rights reserved.