The Internal Revenue Service misdirected stimulus payments for an estimated 13 million accounts, but the agency on Friday said it is trying to redirect to the money to the proper place. If you’re anticipating a stimulus payment that hasn’t yet landed, continue to monitor your bank accounts — and your snail mail.
The I.R.S. was taking “immediate steps” to get stimulus payments to the correct accounts, the agency said in a statement on Friday. “Many additional taxpayers will receive payments following this effort,” the I.R.S. added.
Here’s what happened: Millions of payments were sent to temporary accounts, which are often set up by companies like TurboTax, H&R Block and Jackson Hewitt when they prepare returns. They use the accounts when customers opt to have their preparation fees deducted from their refund, for example, allowing the tax firm to take its share and then pass on the rest.
The accounts may then be closed or become inactive — but may remain linked to the taxpayer’s I.R.S. records.
Tax prep companies have said they’re working with the I.R.S. to resolve the issue. TurboTax said affected customers can expect to receive direct deposits starting on Friday.
You can check the status of your stimulus payment through the I.R.S.’s Get My Payment tool. If it says your payment was sent to an account you do not recognize, it’s not necessarily an indication of fraud, the I.R.S. said. It might just mean you were linked to a temporary account, and you should continue to watch your bank account for a deposit.
More than 100 million stimulus payments have already been deposited directly into recipients’ accounts, the I.R.S. said. About 8 million payments will arrive in the mail on prepaid debit cards.
By law, the I.R.S. said, it must issue the stimulus payments by Jan. 15. After that, those who are entitled to a payment but haven’t received one must instead claim a credit on their 2020 returns. Filers can fill the so-called Recovery Rebate Credit on line 30 of the 2020 Form 1040 or 1040-SR.
Tara Siegel Bernard
Read more from source here…