The House of Representatives voted unanimously to permanently eliminate the smallest piece of U.S. currency, the penny.

The bipartisan Common Cents Act blocks the U.S. Treasury from minting any more pennies, with the exception of collector coins.

Moving forward, cash transactions must be rounded to the nearest 5 cents to eliminate the need for 1-cent coins.

The bill also allows the U.S. Mint to produce nickels from cheaper materials.

Existing pennies will remain legal tender.

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“The move locks in the Mint’s November 2025 decision to stop production after 232 years, ensuring no future administration can reverse course. Minting pennies now costs more than three times their face value, and the Treasury estimates the change saves taxpayers $56 million a year,” Fox News wrote.

Fox News shared further:

The bill was led by House GOP Conference Chair Lisa McClain, R-Mich., and Rep. Robert Garcia, D-Calif., the top Democrat on the House Oversight Committee.

It builds on a past bill McClain led in the House that also passed the Senate directing the federal government to stop minting the penny, but that legislation did not include language on rounding out cash payments.

An additional provision would allow the U.S. Mint to produce nickels from cheaper material than they currently are made with.

Congress would also monitor any disruptions the new rule causes to Americans by directing the Treasury to examine its effect on low-income people, older consumers, debanked people, among other groups.

“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 U.S. Treasury wrote in December 2025.

“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,” it continued.

“In 2024 alone, taxpayers lost more than $85 million producing pennies. Chairwoman McClain’s bill eliminates that wasteful spending by codifying President Trump’s directive to the Mint to stop producing new pennies for circulation,” Rep. Monica De La Cruz (R-TX) said.

Watch below:

More from the U.S. Treasury:

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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.”

Retailers should continue accepting pennies and providing penny change for cash transactions while the coin remains in circulation. When penny change is not available, businesses may round the final amount of a cash transaction to the nearest five-cent increment, recognizing that states will approach this issue differently based on unique considerations. The penny will remain legal tender, meaning it retains its status as an acceptable form of payment.

We recommend that non-cash transactions, such as payments made by check, credit card, or debit card, continue being priced and processed to the exact cent.

Businesses should apply rounding practices in a fair, consistent, and transparent manner.

We recommend that rounding be applied only to cash payments. Payments made with foreign currencies, government checks, gift cards, or split payments can be settled to the exact amount without the need for rounding adjustments.

 

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