Why did the Government decide to stop producing pennies?
Over the past 10 years, the total production cost of the penny has risen from 1.3 cents to 3.69 cents per penny. These production costs include materials, facilities, and overhead. The U.S. Mint projects an immediate annual savings of $56 million in reduced material costs by stopping penny production. Given the increasing number of non-cash transactions and the very low purchasing power of a single penny, the Department of the Treasury does not believe continued production is fiscally responsible or necessary to meet the needs of commerce in the United States.
When will the Government stop distributing the penny?
The federal government has stopped manufacturing new pennies, but the Federal Reserve will continue to recirculate the roughly 114 billion pennies currently in existence for as long as possible. How long existing pennies remain in circulation depends largely on consumer behavior.
The Treasury Department encourages the public to spend their on-hand pennies to support a smooth transition and allow retailers and point-of-sale (POS) system providers time to adapt. This initiative aims to help keep the existing supply in circulation, ensuring clarity and fairness at the point of sale during the transition.
What is Riverbank FCU doing differently?
We will ask you to deposit the pennies from transactions you do at the Credit Union. We will limit purchasing rolled pennies to businesses only. Businesses may purchase up to four rolls of pennies per week while supplies last. Members may continue to deposit pennies. Pennies that total over $0.49 must be rolled. Please write your account number on each roll. We can accept up to 20 rolls per day.
How should businesses respond as the supply of pennies drops?
As pennies fall out of circulation, merchants will need to round transactions either up or down to the nearest five cents. However, most states require sales tax to be calculated on the final sale price rounded to the nearest penny. How states and localities will ultimately amend their sales tax laws is the right and responsibility of those jurisdictions. Recent guidance from the National Council of State Legislators gives some indication how states may adapt. The NCSL’s November 21, 2025 report entitled Elimination of the Penny: Cents-able Considerations states: “The most recommended form of rounding is symmetrical rounding whereby if the final digit of the total transaction amount (including taxes) is 1, 2, 6, or 7 cents, the amount is rounded down to the nearest multiple of five. If the final digit is 3, 4, 8, or 9 cents, the amount is rounded up. Transactions totaling exactly $0.01 or $0.02 might be rounded up to $0.05. Rounding rules would not apply to payments made via electronic methods, checks, gift cards, or other non-cash instruments.”
For more information, please visit https://home.treasury.gov/news/featured-stories/penny-production-cessation-faqs