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IRS to fix error that sent millions of stimulus payments to wrong bank accounts

WASHINGTON -- The IRS says it is fixing an error that prevented millions of people who used tax preparers from getting the second round of $600 stimulus payments. 

The agency said it has direct-deposited about 100 million economic impact payments. Kyle Pomerleau, a fellow at the American Enterprise Institute who specializes in tax policy, estimates there will be 158 million economic impact payments in the second round of stimulus payments.

But some taxpayers using the "Get My Payment" tool on the IRS website to track their stimulus relief are seeing that the money was deposited in a bank account they don't recognize.

The IRS linked the issue to temporary bank accounts that were set up for refund loans or other banking products from such tax preparers as Turbo Tax, Jackson Hewitt and H&R Block.

"The IRS and tax industry partners are taking immediate steps to redirect stimulus payments to the correct account for those affected," the IRS said in a statement, adding: "This is not an indicator of fraud."

In a blog post about the stimulus payment glitch, TurboTax said it had been working with Treasury and the IRS to correct this issue, saying that as of Friday, stimulus payments were being deposited into the bank accounts of its millions of customers affected by the error.

"We expect most of these payments to be available that day, but banks could take a few business days to process," the post said. "Payment will be deposited into the same bank account that customers received their 2019 tax refund.

TurboTax said customers expecting a stimulus payment will get an email about the deposit. For more stimulus information, Turbo Tax is directing customers to turbotax.intuit.com/coronavirus.

"Unfortunately, because of an IRS error, millions of payments were sent to the wrong accounts and some may not have received their stimulus payment. We have been working tirelessly with the Treasury and IRS to get stimulus payments to our customers," the company said. "We know how important these funds are for so many Americans and we regret that an IRS error caused a delay."

In a tweet, H&R Block said, "The IRS determines where second stimulus payments were sent, and in some cases, money was sent to a different account than the first stimulus payment last spring."

H&R Block said it resolved the issue for its clients earlier this week, with customers receiving their stimulus paymentsvia direct deposit or check or onto their Emerald Prepaid Mastercard.

Customers who have still not received their stimulus money are advised to call 1-800-HRBLOCK (472-5625).

Under the second stimulus package, the Treasury Department has until Jan. 15 to get out the $600 payments. If payments can't be direct-deposited or mailed by then, people will have to wait to get their money when they file their 2020 tax returns.

Refunds for tax returns claiming the Earned Income Tax Credit (EITC) cannot be issued before mid-February, according to the IRS. This means people claiming the EITC, which benefits low- and modest-income households, may have to wait even longer to get their stimulus payments.

Both rounds of the stimulus relief are actually advanced credits and will appear on the federal tax form as a "Recovery Rebate Credit."

 

 

 

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