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The third stimulus check is already hitting some bank accounts, just days after President Joe Biden signed the American Rescue Act in law. But while some households will see the funds in the coming days, others may wait longer.
About 85% of people will receive one of the $ 1,400 in checks, Biden said on February 12. But it’s likely that some of the issues that prevented delivery for some people in the previous two rounds could cause a repeat situation. For example, some people who did not have a bank account on file with the IRS during the previous two rounds of checks had to wait several weeks for debit cards or paper checks to arrive at their homes.
It is very likely that people who have filed their 2020 or 2019 tax returns and have a bank account with the tax agency will quickly receive their stimulus checks by direct deposit, depending on previous payment deployments. That’s because the IRS prioritizes the rapid distribution of the stimulus money to those it knows it can reach – and that’s a huge effort, given that the tax agency has $ 422 billion in funds to distribute to over 100 million taxpayers.
“You don’t have to do anything to get your stimulus check,” a TurboTax spokesperson told CBS MoneyWatch in an email. “The IRS will determine eligibility based on your last tax return (2019 or 2020) and will likely send your payment to the bank account where your tax refund was deposited.”
The TurboTax spokesperson added, “If you haven’t yet filed your 2020 return, you can do so now to give your most recent information to the IRS, including bank account or address information. to make sure your stimulus check is going to the right place. “
A financial institution told CBS MoneyWatch that it started receiving payments from the IRS for its clients as of 11 a.m. ET on February 12. The bank, Current, said customers were receiving their stimulus payments faster because some had updated their bank account information with the IRS when they filed their tax returns for 2020 – and added that some accounts had received stimulus payments of up to $ 9,800.
Even though some payments arrived just a day after the bill was signed, the IRS has until the end of 2021 to distribute the checks, according to the law.
Here is what could prevent some people from receiving their money or receiving the wrong amount.
You have not filed your 2019 or 2020 income tax returns
A lot of people probably haven’t yet filed their 2020 income tax returns, given that the deadline to get your tax forms is April 15. In this case, there is no reason to worry – the IRS will use your 2019 tax return to determine how much you should receive.
But it becomes more delicate for people who are not required to file income tax returns, such as those who have little or no income, which may be the case for some people on social security.
This became a problem with the first round of stimulus checks, especially since many of these people needed the first round payments of $ 1,200 the most – and it was not an insignificant number. The IRS said it distributed more than 22 million stimulus payments last year that were not based on filed tax returns.
Because of this problem, the IRS last year created a website specifically for non-filers, where they could provide their bank account information or addresses to the agency, as well as the number of dependents. , who were each eligible for $ 500 in stimulus assistance. at the time.
But the non-filers website has been shut down since late last year, and IRS and Treasury officials said in a conference call with reporters on Feb.12 that they were urging no – tax filers to file a 2020 tax return to make sure they get all payments and taxes. the credits owed to them.
You have filed a paper return
The IRS warned earlier this year that people who file paper tax returns could face delays. This is because the IRS is still dealing with a traffic jam of tax returns filed in 2019 – and it’s likely that 2020 returns filed on paper will also experience processing delays.
The backlog at the tax agency is in part due to the pandemic, which prompted the IRS to shift its workers to remote work. When that happened, he was storing paper tax returns in trailers until he could get it done. At the end of January, there were still 6.7 million reports awaiting processing.
People are expected to file electronically in 2020 to ensure faster processing of their taxes, as well as refunds and stimulus payments, IRS and Treasury officials said on Feb.12.
You have moved or changed your bank account
This could be of concern for people who have received a check in the mail or a prepaid debit card but have recently moved, as well as for people who have changed bank accounts.
The IRS has announced that it will be opening its “Get My Payment” tool on IRS.gov this week. The site will notify people of the status of their payment, but will not allow them to update their bank account information, Treasury and IRS officials said on Feb.12. However, officials added that agencies are working to verify whether the bank account information they have is correct for consumers.
The downside: If a check is issued to a closed or incorrect account, the IRS will have to reissue the payment by check and mail it to your home. It might add to your expectation.
Your bank’s policies
Some people have expressed frustration on social media that their banks said their checks would not be available until Wednesday, March 17, even though the IRS said it started distributing payments over the weekend. . Among the banks chosen by angry customers are Wells Fargo and JPMorgan Chase.
However, the delay is due to the time required for the settlement of funds, according to a statement from Nacha, the organization that governs the ACH network for electronic funds transfer.
“Regardless of when the payment files were sent and received, the settlement of funds for the payments will take place at 8:30 am EST on Wednesday, March 17, exactly as reported by the IRS,” a spokesperson said Monday. “There is no mystery where the money is between when the first payment file was transmitted on Friday March 12 and when all recipients will have access to the money on Wednesday – it is still with it. the government.”
However, some banks may have decided to advance the money to their customers, which is why customers of some banks received deposits as early as February 12.
Wells Fargo told CBS MoneyWatch that it does not hold client funds. Likewise, a spokeswoman for Chase said she will transfer the funds to clients’ accounts on Wednesday, when she expects to get the money from the IRS.
“March 17 is the official payment date provided by the IRS when funds are available, and clients who are eligible to receive a direct deposit of their stimulus payment can wait for it as early as the morning of March 17,” he said. a Wells Fargo spokesperson said. .
You have new or older dependents
Some people can get their checks quickly, but find the amounts incorrect, which could most likely be due to their dependents.
The third stimulus check allows dependents to receive $ 1,400 each, but the IRS may not be aware of your children in some cases. For example, if you had a baby in 2020 but have not yet filed your tax return, the IRS will use your 2019 tax return to determine how much is owed to you, which will not show the new child because he hadn’t. still born.
For example, a couple with a baby born in 2020 should receive $ 4,200, but if the IRS doesn’t have their 2020 tax return, it will issue a payment of $ 2,800 for both adults in the family. But IRS and Treasury officials said on Feb.12 that families in this situation can rest assured that they will eventually get the extra $ 1,400 for their baby.
When they file their 2020 tax return, the IRS will check to see if they owe them more, as in the case of a baby born last year. If that happens, the IRS will automatically issue the additional check for $ 1,400 to the family, officials said.
Similar problems could arise for people who do not normally file income tax returns and who used the non-filers tool to report their dependents last year. Because the first two rounds of edits excluded dependents over the age of 17, the IRS did not count older teens and dependent adults on the non-filer tool.
People who typically don’t file tax returns are encouraged to file a 2020 return this year, Treasury and IRS officials said. This would help the IRS determine if any dependents qualify for the third stimulus check. It would also unlock other tax benefits that these households would not otherwise have claimed, such as the child tax credit or the earned income tax credit, both of which were expanded in the US bailout.
You lost income in 2020 but have not yet filed a return
Some people could also receive less than what they are entitled to if their income drops in 2020, but they have not yet filed their 2020 income tax return. This could happen for a single person earning $ 90,000 in 2019, which is above the $ 80,000 threshold to receive payment, but lost their job in 2020 and only earned $ 45,000 last year as a result.
If that person has not yet filed their 2020 return, they will not receive a stimulus payment because the IRS will base their calculation on their 2019 return, showing that they are not eligible. But as soon as they file their 2020 tax return with the lowest incomes, the IRS will issue them a stimulus payment, IRS and Treasury officials said.
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