Is the penny discontinued? The US penny phase-out, explained

The decision came from the Treasury, not a new law from Congress. In February 2025 the President directed the Treasury to stop producing pennies, and the Secretary of the Treasury exercised existing authority under federal coinage law to end production. The economics drove the decision: each penny cost 3.69 cents to make, the Mint lost 85.3 million dollars producing pennies in fiscal year 2024 alone, and stopping production saves an estimated 56 million dollars per year in material costs. Congress is separately considering the Common Cents Act, which would make the end of the penny statutory, but as of July 2026 that bill has passed only the House.

Yes, indefinitely. Under federal law (31 U.S.C. 5103), United States coins remain legal tender for all debts. The Treasury has confirmed the penny "will retain its full monetary value indefinitely." Banks and credit unions continue to accept penny deposits, though many ask that large quantities be rolled. One note: no federal law forces a private business to accept any particular form of payment, so individual stores set their own cash policies, and a handful of states and cities require businesses to accept cash.

Official estimates vary because they measure different things. The Treasury estimates roughly 114 billion pennies actively recirculating through the banking system. The US Mint estimates as many as 300 billion pennies in existence, many sitting idle in jars and drawers. The American Bankers Association has cited about 250 billion. Whichever figure you prefer, there are more than enough pennies for anyone who wants to keep using them, which is exactly why the government expects a long transition rather than a sudden disappearance.

Because a store that runs out of pennies cannot make exact change. The standard method, sometimes called Swedish rounding, rounds the final cash total to the nearest five cents: totals ending in 1 or 2 cents round down, 3 or 4 round up, 6 or 7 round down, 8 or 9 round up. Three rules matter for consumers. Rounding applies only to cash. It applies only to the final total after tax, never to individual item prices. And card, debit, check, and electronic payments are still charged to the exact cent, always.

The evidence says no, as long as it is applied fairly. Because totals round down about as often as up, symmetric rounding is close to neutral over time. The Federal Reserve Bank of Richmond estimated the total effect at about 6 million dollars per year across all US consumers, which works out to pennies per person. A Federal Reserve Bank of Atlanta analysis found that 72 percent of cash payments already end in zero pennies and would never be rounded at all. Canada retired its penny in 2012 and 2013 using the same method without a measurable effect on prices. The risk is not the method. It is inconsistent application, which is why states have begun writing rounding rules into law.

It depends on where you are, and the map is changing fast. As of July 2026, 20 states have enacted cash rounding laws. Most are permissive, meaning they allow businesses to round but do not require it. Arizona, Georgia and Indiana obligate merchants to round. Arizona fixes the symmetric method by law. Four states (Kentucky, Minnesota, New Mexico, and Oklahoma) enacted narrower laws limited to tax or government payments. Missouri's law was signed July 13, 2026, and takes effect August 28. New York's bill passed both chambers and awaits the governor's signature; if signed, it would become the second mandate. For the current status of every state, cited to the primary source, see our live legislation tracker. Businesses reviewing their own obligations should start with cash rounding compliance requirements.

Both chambers have now passed it, but it is not law. The House passed H.R.3074 by voice vote on July 14, 2026. The passed version permits rounding rather than requiring it, gives businesses that follow the standard method a liability safe harbor, excludes checks and electronic payments from rounding entirely, and directs the Federal Reserve to study how the transition affects low-income, unbanked, and older Americans. It does not override any state law. The Senate companion bill , S. 1525, passed the Senate by unanimous consent on August 7, 2026 and was received in the House on August 10, 2026, where it awaits further action before it can be presented to the President. Until that happens, state law remains the operative rulebook everywhere.

Almost certainly not. Ordinary circulating pennies are still worth one cent, and production ending does not change that, because billions remain in existence. Only specific rare dates and minting errors carry collector premiums, and those were valuable before the phase-out. It is also illegal to melt pennies for their metal value under Treasury regulations (31 CFR 82), so the copper and zinc are not a payday either. Check any jar for rarities if you enjoy it, then spend or deposit the rest.

Three matter most. First, card payments cannot be rounded, so paying electronically always costs the exact amount. Second, most states with a rounding law calculate sales tax on the pre-rounded total, so rounding usually does not change the tax you owe. Georgia, Hawaii and Indiana round a tax-inclusive total, and Minnesota does not address tax computation. Third, federal SNAP rules require that EBT customers receive the same prices and terms as cash customers, which means rounding practices cannot disadvantage SNAP households. Cash usage is not evenly distributed: Federal Reserve data shows households earning under 25,000 dollars rely on cash for about 24 percent of their payments, compared to about 9 percent for the highest-income households, which is why fair and consistent rounding matters most for the people who use cash most.

This guide is written for consumers. The same transition looks different from inside a business.

• The future of the penny is the strategic view: what merchants, POS vendors, and financial institutions should prepare for as circulation declines.
• Managing cash change orders without pennies is the operational view: how change orders, till composition, and bank deposits shift once the one cent line disappears.