The third stimulus check is already reaching some bank accounts, a few days after President Joe Biden signed the American Rescue Act in law. But while some families will see the funds this week, others may have to wait longer.
About 85% of people will receive one of the $ 1,400 checks, Biden said on March 12. It is also likely that some of the problems that prevented delivery to some people in the previous two rounds of stimulus could cause a situation to repeat for the third time. For example, some people who did not have a bank account registered 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 more likely that people who filed their 2020 or 2019 tax returns and have a bank account registered with the tax agency will quickly receive their stimulus checks through direct deposit, based on previous payment implementations. That’s because the IRS prioritizes quick distribution of stimulus money to those it knows it can reach – and it’s a huge effort, given that the tax agency has $ 422 billion in funds to distribute to more than 100 million taxpayers.
About 100 million checks will be issued in the next 10 days, according to IRS and Treasury officials in a conference call on Monday.
“You don’t have to do anything to get your stimulus check,” a TurboTax spokesman told CBS MoneyWatch via 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 spokesman added: “If you have not yet submitted your 2020 return, you can do so now to provide your most recent information to the IRS, including bank account or address information to help ensure your stimulus check goes. to the right place. “
A financial institution told CBS MoneyWatch that it began receiving payments from the IRS to its customers as of 11 am EST on March 12. Current bank said some accounts received stimulus payments of up to $ 9,800. He added that he is making all funds available by using his balance sheet to credit the funds, rather than waiting for the funds to be settled by the government.
Even though some payments arrived just one day after the project was signed, the IRS has until the end of 2021 to distribute the checks, according to the legislation.
Here is what can prevent some people from getting their money or receiving the wrong amount.
You have not filed your 2019 or 2020 tax returns
Many people probably haven’t filed their 2020 tax returns yet, as the deadline for receiving their tax forms is April 15th. In that case, there is no reason to worry – the IRS will use your 2019 tax return to determine how much you should receive.
But this becomes more complicated for people who are not required to file income tax returns, such as those with no or little income, which may be the case for some Social Security people.
This became a problem with the first round of stimulus checks, especially since many of these people were in dire need of the first round’s $ 1,200 payments – 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 completed tax returns.
Because of this problem, the IRS created a specific website for non-architects last year, where they could provide their bank account information or addresses to the agency, as well as provide their number of dependents, who were eligible for $ 500 in aid. of stimulus. at the time.
But the non-filers’ website has been closed since late last year, and IRS and Treasury officials said in a March 12 conference call with reporters that they are asking non-filers to file a 2020 tax return to ensure they receive all payments and tax credits that are due.
You have submitted a paper return
The IRS warned earlier this year that people filing tax returns on paper may face delays. That’s because the IRS is still dealing with a congestion of tax returns filed in 2019 – and the 2020 returns filed on paper are likely to experience processing delays as well.
The tax agency’s delay is partly due to the pandemic, which prompted the IRS to transfer its workers to remote work. When that happened, she stored paper tax returns on trailers until she could reach them. At the end of January, there were still 6.7 million returns awaiting processing.
People must file an electronic declaration in 2020 to ensure faster processing of their taxes, as well as their refunds and stimulus payments, IRS and Treasury officials said on March 12.
You moved or changed your bank account
This can be a concern for people who have received a check in the mail or a prepaid debit card, but have recently moved, as well as people who have changed their bank accounts.
The IRS said it will open its “Get My Payment” tool on IRS.gov this week. The website aims to inform people about the status of their payment, but does not allow them to update their bank account information, Treasury and IRS officials said on March 12. 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 need to reissue the payment by check and send it to your home. This can increase your wait.
Your bank policies
Some people expressed frustration on social media because their banks said their checks would not be available until Wednesday, March 17, although the IRS announced that it began distributing payments over the weekend. Among the banks chosen by angry customers were Wells Fargo and JPMorgan Chase.
However, this delay is due to the time needed to settle the funds, according to a note from Nacha, the entity that governs the ACH Network of electronic funds transfer.
“Regardless of when payment files were sent and received, settlement of funds for payments will take place at 8:30 am EST on Wednesday, March 17, exactly as instructed by the IRS,” said a spokesman on Monday. “There is no mystery as to where the money is from the moment the first payment file was transmitted on Friday, March 12, until when all recipients will have access to the money on Wednesday – it is still with the government. “
However, some banks may have decided to advance the money to their customers, which is why some bank customers received deposits as early as March 12.
Wells Fargo told CBS MoneyWatch that he is not withholding customers’ funds and will deposit them as soon as they obtain them. Likewise, a spokeswoman for Chase said the bank will transfer funds to clients’ accounts on Wednesday, when it expects to receive money from the IRS.
“March 17 is the official payment date provided by the IRS when funds are available, and customers who are eligible to receive a direct deposit of their stimulus payment can expect it as early as the morning of March 17,” said one spokesman for Wells Fargo.
Do you have new or older dependents
Some people can receive their checks quickly, but discover that the amounts are incorrect – this is probably due to their dependents.
The third stimulus check gives dependents the right 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 income tax return, the IRS will rely on your 2019 tax return to determine how much you owe, which it will not show the new child because he has not yet born.
Example: A couple with a baby born in 2020 should receive $ 4,200, but if the IRS does not have their 2020 tax return, they will issue a payment of $ 2,800 to the two adults in the family. But IRS and Treasury officials said on March 12 that families in this situation can be assured that they will receive an additional $ 1,400 for their child.
When they file the 2020 income tax return, the IRS checks whether they are owed more, as in the case of a baby born last year. If that happens, the IRS will automatically issue the additional $ 1,400 check to the family, officials said.
Similar problems can occur for people who normally do not file tax returns and who used the non-filing tool to report their dependents last year. As the first two rounds of checks excluded dependents over the age of 17, the IRS did not count older teenagers and adult dependents in the no-filing tool.
People who do not normally report taxes are expected to make a 2020 return this year, Treasury and IRS officials said. This would help the IRS to identify whether they have dependents who qualify for the third stimulus check. This could also unlock other tax benefits that these families might not have claimed, such as Child Tax Credit or Earned Income Tax Credit, both of which were expanded in the American Rescue Plan.
You lost income in 2020, but have not yet filed a statement
Some people could also receive less than they are entitled to if their income decreased in 2020, but they have not yet filed their 2020 tax returns. This could happen for a single person who earned $ 90,000 in 2019, which is above the $ 80,000 limit. to get paid, but lost his job in 2020 and earned just $ 45,000 last year as a result.
If that person has not yet registered their 2020 return, they will not receive a stimulus payment because the IRS will base their calculation on their 2019 return, which has shown that they are not eligible. But as soon as they file their 2020 income tax return with the lowest income, the IRS will issue a stimulus payment to them, said IRS and Treasury officials.
–With a report by Sarah Ewall-Wice.