Penny Phase-Out

Pennies Are Phasing Out – What You Need to Know

The U.S. Treasury has announced that pennies will soon be phased out, with production ending once the current supply is exhausted. Pennies will remain legal tender, but as their availability declines, cash transactions may need to be rounded to the nearest five cents. This change affects both individuals and businesses and may have tax reporting implications.

The Federal Reserve and Treasury have provided preliminary guidance, but many details, including the exact method for rounding, are still evolving. We will continue to update this page as new information becomes available.

Background

• Pennies cost more to produce than their actual value. Discontinuing production saves resources and reduces costs.
• While pennies remain legal tender, businesses and financial institutions are encouraged to begin preparing for cash rounding.
• Electronic payments (credit, debit, online) are not affected and will continue to be processed for exact amounts.

How This May Affect You

• Cash transactions may be rounded to the nearest five cents.
• Point of sale systems and accounting software may need updates.
• Businesses should be aware of possible tax reporting implications due to cash rounding.
• Electronic transactions (credit, debit, online) are not rounded.
• You may need to post signage to inform customers of your rounding method.
• Staff may need training or guidance to handle cash rounding changes.
• Cash intensive businesses may consider ordering a larger stock of pennies to manage transactions during the transition.

Next Steps

• Review this page regularly for updates.
• Prepare for potential rounding of cash transactions.
• Monitor point of sale systems and accounting processes.
• Contact your accountant, tax advisor, or financial advisor with questions.

We’re here to help you navigate this change. If you have questions, contact us for guidance.