What to Know
- If your coronavirus stimulus payment hasn’t landed, a glitch with your tax preparation service could be to blame, according to one new report.
- Because of the way those payments are structured, the IRS may not have your current bank account information on record.
- Here’s what we know now about who is affected.
Wondering where your coronavirus stimulus payment is? The delay could be due to a glitch related to your tax preparation service.
A new report from The Washington Post on Thursday estimates that millions of Americans could still be waiting to see their stimulus money if they previously filed their taxes with companies such as H&R Block, Jackson Hewitt and TurboTax.
Those companies offer services where consumers can get refunds due from their tax returns immediately for a fee. The money is often provided through debit cards that are attached to temporary bank accounts.
The government is using that information from past tax years, particularly 2018 and 2019, to send the one-time stimulus payments. Consequently, the IRS may not have those individuals’ direct deposit information on file to make the payments.
This may only affect a portion of these companies’ clients, those who opt for what’s known as refund anticipation loans. It could also affect consumers who pay for those companies’ services through their tax refunds.
The Treasury Department is urging consumers who used these types of advances for their 2018 or 2019 tax filings to access the Get My Payment web app to enter their direct deposit information, a spokeswoman for the agency said.
In addition to your bank account information, you will also need to know the amount of your last tax refund.
The new web app was difficult for many individuals to access when it first went live this week because of high volume. So far, it has successfully captured the direct deposit information for millions of Americans, the spokeswoman said.
The blame can’t be pinned entirely on the IRS for the mishap, said Chi Chi Wu, a staff attorney at the National Consumer Law Center.
“This is an agency that’s been chronically underfunded, has had to deal with antiquated computer systems,” Wu said. “They’re short on staff and they just stood up an entire system to process 80 million direct deposits and multiple new websites in a matter of weeks.”
Coronavirus Pandemic Coverage
In a statement, TurboTax, which is owned by Intuit Inc., denied the refund issue is a problem for its customers.
“The bank account information for TurboTax filers is transmitted to the IRS as a part of the tax return,” said TurboTax spokeswoman Ashley McMahon. “The IRS has the appropriate banking information for all TurboTax filers, which can be used by them to distribute stimulus payments.”
Some TurboTax customers have chosen to receive their stimulus payments through either a refund transfer or debit card, McMahon said. But that should not preclude those taxpayers from getting their money.
“Any TurboTax customer who selected refund transfer or a debit card that gets a stimulus payment sent from the IRS to those accounts will receive those stimulus payments without delay or fees,” McMahon said.
Meanwhile, a spokeswoman for Jackson Hewitt said the company is sending consumers with questions to the Get My Payment app.
Consumers beware
“The IRS has not announced how it will send the stimulus payment to taxpayers who selected [refund] bank products during their most recent tax filing,” a Jackson Hewitt spokeswoman said. “We are directing clients to Get My Payment to find their payment status, type and whether the IRS needs more information, including bank account information.”
A spokeswoman for H&R Block said the IRS has all the bank account information for its customers who received tax refunds electronically.
“They have created confusion by not always using clients’ final destination bank account information for stimulus payments,” said Susan Waldron, a spokeswoman for the company. “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.”
The issue does highlight the need for more consumer awareness before taking these refund deals, which can come with fees as high as $35 to $45 as well as a $200 to $300 tax preparation fee.
While some tax preparers explicitly point out that the fees are bank products and how much they cost, others don’t, Wu said. Consequently, many people may not even realize they have been charged.
This story first appeared on CNBC.com. More from CNBC:
