Millions of dunning payments for TurboTax and other clients sent to bad accounts

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The payments – worth up to $ 600 per taxpayer and $ 600 for each of their dependents – were part of the latest Covid relief program signed at the end of December.

The IRS began issuing direct deposits of these payments on Dec. 29 and says up to $ 100 million has already been made.

But, according to Intuit TurboTax spokeswoman Ashley McMahon, “Millions of payments were sent to the wrong accounts, and some may not have received their stimulus payment.”

About 13 million people may have been affected, according to a banking industry source.

The IRS said Friday it was taking immediate action to redirect stimulus payments to the appropriate account for those affected.
“For taxpayers who have verified Get My Payment and received a response that a direct deposit should be sent to an account they do not recognize, the IRS advises them to continue monitoring their bank accounts for deposits,” the agency said.

Those most likely to be affected are those who have used prepayment loans or similar products. In those cases, their stimulus payments may have been directed to the temporary bank account opened by the online tax preparation company they used when filing their 2019 tax return.

It may also have affected some people who have changed banks in the past year, and the IRS has yet to register their new checking account.

Earlier this week, the IRS attributed the error to the speed at which the new law required the agency to issue the second round of economic impact payments.

For anyone who does not receive their stimulus payment before filing their 2020 tax return, the IRS advises them to apply for the refundable refund credit. The credit will be given in the same amount as the stimulus payment for which you are eligible. Refundable credits reduce your tax liability dollar for dollar and if it exceeds your tax liability, the rest will be sent to you as a refund.
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Early Friday morning, TurboTax said its clients will likely start having their stimulus payments deposited shortly.

“Stimulus payments will begin to be filed Jan. 8 for millions of our clients affected by the IRS error,” the company wrote on its blog. “We expect most of these payments will be available on that day, but banks could take a few business days to process.”

TurboTax said it will email clients when their payments have been deposited.

You can find more information from the IRS on the status and procedures for receiving your stimulus payment here and here.

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