Common Questions About Stimulus Payment Problems, Answered
Like many Americans, 62-year-old Larry Dansky of Ashland, Ore., has been anxiously awaiting his family’s stimulus payment, a bit of extra income that could help pay the bills amid an unprecedented economic slowdown. But when he logged on to the IRS’ website to track his payment, he was alarmed to see it had been deposited into an old account that he had shut down last summer to get the bonus from opening a new one.
“I was kind of devastated because it [felt] like, ‘here comes a rescue ship,’ and it keeps on going by,” said Dansky. His bank rejected the payment and sent it back to the IRS, and he should eventually receive his stimulus payment as a paper check in the mail. However, the mailing address the IRS has on file for him is tied to a motel 140 miles from where he lives now. He said he called up someone at the front desk and offered them $50 to let him know when it comes. Then he’ll make the trek to pick it up.
The one-time stimulus payments are a tentpole of the $2.2 trillion CARES Act, which is meant to prop up the economy amid the coronavirus pandemic. Americans who aren’t listed as dependents and whose income falls within a certain range can qualify for up to $1,200, or $2,400 for married couples filing jointly, as well as $500 per child under 17 years old. But many, like Dansky, are facing issues with receiving their payment.
Here’s a look at some of the problems being reported with the stimulus payments, and what’s being done to address those issues.
Some payments were sent to closed accounts
Tony Papatyi, a 56-year-old father in Omaha, Neb., told TIME that he and his 22-year-old daughter decided to separate their finances after she graduated from nursing school. They filed their 2019 taxes separately, got their returns sent to their joint bank account, and then closed the account. But Papatyi, like many others who have recently written to TIME, suspects their payments will be sent to that closed account, just as they were for Dansky.
Read more: Receiving government benefits? Here’s what to know about your stimulus payment
If you filed your 2018 or 2019 tax return with direct deposit information, the IRS will use that information to deposit your stimulus payment directly in your bank account. The agency says that if it attempts to use direct deposit but an account is closed, the bank will reject the deposit, and the IRS will mail you a paper check with the address it has on file for you. However, paper checks may take weeks longer to arrive than direct deposits. Regardless of how the IRS sends your stimulus payment, it will also send a letter to the mailing address it has on file for you to let you know “how the payment was made and how to report any failure to receive the payment,” according to its website.
A new IRS online tool called Get My Payment allows people to track their stimulus check, as well as send the IRS their direct deposit information if they did not include it in their recent tax returns. However, if the site says that your payment has already been processed, you won’t be able to change your direct deposit information.
But act quickly. The IRS said on May 8 that people have until noon on May 13 to input their direct deposit information into Get My Payment. After the May 13 cutoff, the IRS will prepare paper checks “that will begin arriving through late May and into June,” according to an IRS statement.
The Get My Payment site also has some known issues, including a message that mistakenly told some users that payments rejected by banks were being re-sent to the same account. Those payments “are actually being mailed to the taxpayers,” a Treasury Department spokesperson told TIME. “The IRS has quickly taken steps to correct this reporting error. Get My Payment will be updated starting Tuesday, April 21 to reflect that the taxpayer’s payment has actually been mailed; not rerouted to a closed bank account.”
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Some payments were sent to the wrong accounts
“Several million people” who filed their taxes through tax preparation services like H&R Block and TurboTax were unable to get their payments last week because of confusion around their direct deposit information, The Washington Post reports.
The issue appears tied to “refund transfers,” sometimes called Refund Anticipation Loans (RALs) or a Refund Anticipation Check (RAC). Through these offerings, tax prep companies give people their refund more quickly, minus a fee, said Francine Lipman, a professor specializing in tax law at the University of Nevada, Las Vegas. The money is sent to users via direct deposit or on a debit card mailed to them. The tax prep companies then set up a temporary bank account to collect the user’s full tax refund, often weeks later. More than 20 million households used this option when filing their taxes in 2017, according to The National Center on Law & Elder Rights.
The Treasury Department told TIME on April 17 that the IRS didn’t have direct deposit information for tax filers who used a refund transfer and received their money on a debit card. As of April 22, the IRS’ website says that some of these filers’ payments may have been sent to the bank account or debit card tied to their tax prep company.
An H&R Block spokesperson told TIME that the IRS “has bank account information for all H&R Block clients who received tax refunds electronically, and is determining when and how stimulus payments are distributed.”
“[The IRS] has created confusion by not always using clients’ final destination bank account information for stimulus payments,” the spokesperson continued. “We share our clients’ frustration that many of them have not yet received these much-needed payments due to IRS decisions, and we are actively working with the IRS to get stimulus payments sent directly to client accounts.”
Likewise, a TurboTax spokesperson said that the “IRS has the appropriate banking information for all TurboTax filers, which can be used by them to distribute stimulus payments. This is true regardless of whether a customer chose to receive their refund on a debit card, selected refund transfer or other services.”
“Any TurboTax customer who selects a refund transfer or a debit card and gets a stimulus payment sent from the IRS to those accounts will receive those stimulus payments without delay or fees into the account they received their tax refund,” the TurboTax spokesperson added.
TIME has asked both the IRS and the Treasury Department for more information to sort out these claims.
If the IRS sends a stimulus payment to a temporary refund transfer account that is now closed, the bank is required to reject the payment and send it back to the IRS. “Timing of this process depends on several variables, including when and how the payments are rejected and returned to the IRS, when ‘Get My Payment’ updates, and when taxpayers check the tool,” reads the IRS website.
Affected payment recipients will then have to wait for their paper check to be sent out to the last address the IRS has on file for them, or their last address on file with the U.S. Postal Service, depending on what’s most current. “Often, these folks will be getting checks,” Eric Smith, a media relations specialist at the IRS, told TIME in an email.
Lipman said this problem may be particularly troublesome because many of the people who opt for refund transfers are low-income individuals without a steady cash flow — exactly the people most in need of their stimulus payments.
Grace Allison, the director of the New Mexico Legal Aid Low Income Taxpayer Clinic, told TIME that one of her clients — a low-income woman who supports her granddaughter — had opted for a refund anticipation loan on her 2018 taxes. “Fast forward to 2020. The IRS website tells her that her refund has been sent to an account that she does not recognize,” Allison wrote in an April 21 email. “With a little sleuthing, I figure out it is the temporary account set up on behalf of the tax preparation company for the 2018 tax season.” She said the company is returning the payment to the IRS and her client will receive her check in the mail.
The IRS told TIME on April 28 that some people whose money had been sent to temporary accounts mistakenly saw a message in Get My Payment that said their payments had been re-sent to that same account. The IRS said that money is actually being sent in the mail, and that message should no longer appear.
IRS phone lines are down
Doug McKirahan, a 64-year-old San Franciscan, told TIME he struggled to input his information into the IRS’ Get My Payment tool before finally succeeding last week. But McKirahan said what’s most frustrating is his inability to contact the agency directly. The IRS said it’s currently unable to provide live assistance due to reduced staffing because of the coronavirus pandemic. It has also greatly reduced its responses to paper correspondences.
“I mean, they’re specifically saying ‘we will not answer calls,’” McKirahan said. “So you’re left wondering, am I ever going to see this or not? And if so, how? How is this problem going to end up getting solved?”
Read more: The IRS is sending stimulus payments to millions of Americans this week. Here’s how to get yours faster
TIME received dozens of emails from others left frustrated because they couldn’t contact the IRS about their stimulus payment. Married couple Bob and Darcy Tomko, for instance, believe they received a smaller payment than they qualify for, but they can’t figure out how to report their problem. Bob said he called the IRS to no avail, and then tried “about 20 different numbers” at the Treasury Department for multiple hours. He eventually reached someone who said they couldn’t help him.
The IRS and the Treasury Department did not respond to TIME’s questions about how people can report their problems to the IRS. However, the IRS website says the agency will send everyone a letter within 15 days after their payment has been sent out, and that letter will include information on how to report problems.
Reported glitches with the ‘Get My Payment’ tool
When you log into the IRS’ “Get My Payment” tool, you might get a message saying “payment status not available.” The agency says this message could appear for multiple reasons: If you’re not eligible for a payment, if you still have to file your 2018 or 2019 taxes, if you only recently filed a tax return or provided your information through a portal for non-filers, or if you’re an SSA or RRB Form 1099 recipient or a SSI recipient, meaning your information is not yet in the system.
However, multiple people told TIME that they were given the “payment status not available” message even though they don’t fall into any of the above categories. One difficulty is that the “payment status not available” message also shows up when you input your information incorrectly. Chris Blanchette, a 31-year-old small business owner in Florida, told TIME that he repeatedly entered his information into Get My Payment — and was locked out for 24 hours after trying too many times — before he realized he had to exclude the number sign from his address. He’s frustrated that the IRS site doesn’t offer a different message for people who made a mistake and those who simply don’t qualify for a payment.
When asked about the “payment status not available” errors, Smith of the IRS told TIME that “the key is that it is most definitely not a one and done situation. We’re updating status information every day. For a particular person, it’s possible that no info is available today, but that could change tomorrow.” He said the payment status updates every day, usually overnight. “But repeated attempts on the same day is not necessary and can result in a lock-out for that day,” he added.
After recent reports of long wait times and website crashes, the IRS said that it’s “actively monitoring site volume; if site volume gets too high, users are sent to an online ‘waiting room’ for a brief wait until space becomes available, much like private sector online sites.”
Other users have said a glitch in the Get My Payment form prevented them from entering their direct deposit information. Mary Fullerton, a 59-year-old resident of Crystal Beach, Fl., told TIME that she couldn’t input her banking info because the tool requires people to select whether they received a refund or owed money during the previous tax year. Fullerton, who is retired, did neither. On April 28, the IRS told TIME it has fixed this issue, and users can now enter “0” and move forward to input their direct deposit information.
On April 26, the IRS said that it had made “significant enhancements” to Get My Payment to “deliver an improved and smoother experience for Americans eligible to receive Economic Impact Payments.” The IRS said that it “adjusted several items” related to the tool, which will “help millions of additional taxpayers with new or expanded information and access to adding direct deposit information.”
When asked what specific improvements were made, the IRS told TIME there had been previously instances where people had tried to input their direct deposit information into the tool but a glitch had prevented them from accessing the web page to input their information. The IRS said that should no longer be happening.
Some people married to immigrants won’t get a payment
In order for a married couple filing jointly to receive a payment, both people must have a valid Social Security number (with the exception of couples in which either partner is a member of the U.S. military during the taxable year).
According to the Migration Policy Institute, about 1.2 million immigrants without Social Security numbers are married to U.S. citizens, potentially excluding those couples from receiving a payment. However, a Treasury Department spokesperson said that some of those people do not file jointly with their spouse, or may qualify for the military exemption, so the actual number of couples who don’t receive a stimulus payment for this reason should be smaller than 1.2 million.
Still, The Los Angeles Times reports that this rule potentially means that frontline workers like hospital employees, first responders and public transportation employees will not receive a payment.
Some banks have seized stimulus payments from overdrawn accounts
Some people have said their stimulus payments were seized by their bank to cover debts on overdrawn accounts, The New York Times reports. Banks are legally allowed to withhold funds from accounts with negative balances, and there’s no provision in the CARES Act to prevent them from doing so in the case of stimulus payments, according to the Times.
“We are aware of the issue and are actively working on this,” a Treasury Department spokesperson told TIME.
The USAA, which serves veterans and their families, was among the banks reportedly seizing payments to pay off overdrawn accounts. However, it reversed its position on April 16 following a report by The American Prospect. In a statement to TIME, the USAA said that it has “applied this policy retroactively to any member accounts with a negative balance at the time the first wave of stimulus payments were deposited.”
Anat Admati, a professor of finance and economics at the Stanford Graduate School of Business, told TIME that she believes it’s “not right” that some banks have been allowed to garnish the stimulus payments from overdrawn accounts amid a pandemic that’s ground the economy to a halt.
“If [people] decide to cover the overdraft they can, but they shouldn’t be made to do that,” said Admati. “It should not be up to the banks to decide whether people should buy food with it, or pay rent, or cover overdraft.”
Many major banks, including Bank of America, JPMorgan Chase, Citibank and Wells Fargo, have said they will temporarily stop garnishing funds from overdrawn accounts so people can access their stimulus payments, according to the Times.
Some people say they didn’t receive payments for their children
When 42-year-old Shelly Cellak of Wilmette, Ill., went to go check her stimulus payment, she was shocked to see the $500 payments for her two children had not arrived. Both her children are under 17 and she listed them as dependents on her 2018 and 2019 tax returns. Many other TIME readers described a similar situation.
“We’re still reviewing that issue, though many people with children are also receiving their payments,” said Smith of the IRS.
“As with everyone else, our response to the coronavirus challenge continues to evolve,” Smith continued. “At any given time, the most current information on our available assistance will be posted on our Coronavirus page under IRS operations and services.”
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