Millions Won't Get Stimulus Money Before The IRS Cut-Off Date

Millions Won't Get Stimulus Money Before The IRS Cut-Off Date

Cara Shillenn  Fri, January 15, 2021, 7:00 AM

A chunk of stimulus payments are missing in action, thanks to a mix up that put as many as 13 million checks into invalid bank accounts.

Why it matters: The IRS (by law) was supposed to get all payments out by Friday. Now the onus could shift to Americans to claim the money on their tax refund — further delaying relief to struggling, lower-income Americans.

What's going on: The newest COVID-19 relief bill — signed in the final days of 2020 — mandated the $600 payment to those making up to $75,000 per year (or 150,000 for joint filers) get out by Jan. 15.

The fast turnaround meant “some payments may have been sent to an account that may be closed or, is or no longer active, or unfamiliar,” according to the IRS website.

To get a sense of the speed: It took 19 days to distribute half the first-round payments last spring, but two-thirds of payments were out the door just a week after the latest bill became law, according to an analysis by the Committee for a Responsible Federal Budget.

Billions of those dollars are in the process of being returned to the IRS by tax preparers because of the error, though the IRS would not say how many payments were incorrectly deposited.

Jackson Hewitt estimates funds were deposited in 13 million accounts that were no longer open.

How it works: These accounts are typically set up by tax prep companies, most often used by financially constrained taxpayers to get their refunds faster.

You can check the status of your stimulus payment — and whether you can expect it by paper check, debit card or direct deposit — here.   https://www.irs.gov/coronavirus/get-my-payment

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