What If I Don’t Recognize The Bank Account Number
Don’t panic it’s most likely not fraud. It actually has something to do with how you filed your 2019 taxes and received your refund.
Millions of people file their taxes through online tax software providers every year. It can be simple, convenient, and more affordable than visiting a CPA .
In an effort to extend that convenience, H& R Block, TurboTax, and a few others offer users an option to pay for their services through their refund instead of via credit or debit card on the spot. It sounds easy, but there’s usually an additional fee tacked on. H& R Block and TurboTax both charge $40 per federal refund for this option, on top of the fee you paid to prep and file your taxes.
refund transfer programsplus an additional fee of up to $40
Because H& R Block and TurboTax have first claim to your refund, they essentially set up a holding account where the IRS will deposit your refund when it’s ready. This account number is listed on your tax return and that’s what you’re seeing in the “Get My Payment” tool. For a typical refund, after the tax provider’s share is taken out, the rest is deposited in your bank account of choice. It usually happens quickly.
Unfortunately, that process is in conflict with how the IRS handles stimulus payments. In situations where holding accounts are no longer active the tax provider has already taken their fee and transferred the refund to the taxpayer stimulus payments are bouncing back to the IRS.
Payments To Closed Accounts Will Be Reissued
According to the IRS, the stimulus payments will be deposited into the bank account where a taxpayer’s last tax refund was deposited. In some cases, the IRS has not processed 2020 returns yet, meaning it will still be deposited into the account the 2019 refund was sent to. Others will receive their stimulus payment by check.
Treasury Department and IRS officials have said that they had worked to correct the account mix-up problem, and that there would be a way for any taxpayers experiencing the issue to fix it.
In response to this article, an IRS spokesperson told CNBC Make It that the agency believes “the volume of payments going to closed accounts will be significantly less than any previous round of Economic Impact Payments.”
Any payments sent to closed accounts will be returned to the IRS and reissued in less than two weeks, the spokesperson said. Some have already been reissued. The Get My Payment tool will show the updated information when it’s available, and taxpayers will not have to take any action themselves.
“We are working hard to minimize the burden on taxpayers wherever possible during this extraordinary time,” the IRS spokesperson said. “We have been working around the clock on the stimulus payments and the filing season.”
How Do I Calculate The Amount Of My Credit
The amount of the credit is based on your:
- Filing status
- Amounts of your economic impact payments previously received
- Adjusted gross income
If you’re eligible for the full credit, you may receive up to the following amounts.
The first economic impact payment, or up to:
- $2,400 if youre married, filing jointly, or
- $1,200 for any other filing status, and
- $500 for each qualifying child under age 17 at the end of 2020
The second economic impact payment, or up to:
- $1,200 if youre married, filing jointly, or
- $600 for any other filing status, and
- $600 per eligible qualifying child under age 17 at the end of 2020
If you have already received Economic Impact Payments for the full amounts that you’re eligible for based on your 2020 tax return, you don’t qualify for any additional credit. However, if you received more than you are qualified to receive based on your 2020 tax returns, you do not have to pay back the excess amount.
If you received less than you are eligible for based on your 2020 situation, you can calculate the additional amount of credit to be included on your 2020 tax return.
The credit amount on your tax return begins with the maximum that you are eligible for in 2020. This amount is then reduced by 5% of the amount that your AGI exceeds these levels:
- $75,000 for single or married filing separately
- $112,500 for head of household
- $150,000 for married filing jointly or qualifying widower
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Who Is Eligible For The Recovery Rebate Credit
Qualifying for the initial advance payments was based on the information that the government had at the time of distributing the payments. This could have been from your 2019 tax return or your 2018 tax return if you had not already filed a 2019 return by the time the money was issued. If you are attempting to claim part or all of the credit on your 2020 tax return, the credit will be based on your 2020 tax information.
In order to qualify for any of the credit on your 2020 tax return, you:
- Must be a U.S. citizen or U.S. resident alien in 2020
- Cannot have been a dependent of another taxpayer in 2020
- Must have a Social Security number that is valid for employment before the 2020 tax return due date
This includes someone who was born or died in 2020.
In some rare cases, a married couple filing a joint return may qualify for a full credit even if only one spouse has a valid Social Security number. On the other hand, nonresident aliens, estates, and trusts don’t qualify for the credit.
After meeting the qualification requirements above, the taxpayer’s adjusted gross income must fall within the limits to receive the credit based on their situation. Other eligible taxpayers may include those who:
When Will I Get The Recovery Rebate Credit
You will most likely get the Recovery Rebate Credit as part of your tax refunds. If you electronically file your tax return, you will likely receive your refund within 3 weeks. If you mail your return, it can take at least 8 weeks to receive your refund.
Claiming the Recovery Rebate Credit will not delay your tax refund. However, if you dont claim the correct amount of the Recovery Rebate Credit, your refund may be delayed while the IRS corrects the error on your return. The IRS will send you a notice of any changes made to your return.
You can check on the status of your refund using the IRS Check My Refund Status tool.
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What If I Get A ‘not Available’ Message
The IRS says anyone who receives this status message either isn’t eligible for a second stimulus check or is but won’t be getting theirs right now.
However, several Twitter users who filed their taxes using TurboTax have told me this week that after initially seeing a “not available” status message, their stimulus payment was later deposited into their bank account. TurboTax tweeted on January 8 that users will get an email when their stimulus deposit is on the way.
Most importantly, anyone who qualifies for a first or second stimulus payment and doesn’t get it by direct deposit or in the mail will be able to claim the money on their 2020 tax return. It will be labeled a “recovery rebate credit” on Form 1040 and used to offset your 2020 tax bill. If your tax bill is reduced to $0, you’ll get the remaining money back as a refund.
Tanza Loudenback, CFP®, is the personal-finance correspondent at Business Insider. She writes most frequently about saving money, planning for retirement, taxes, debt management, and strategies for building wealth. Have a money question for Tanza? Fill out this anonymous form.
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TurboTax and H& R Block customers are reportedly struggling to get their stimulus checks once again but officials say the problems are less widespread this time around.
Dozens of people who filed tax returns through the companies have had their $1,400 coronavirus relief payments sent to the wrong accounts, according to CNBC.
A similar glitch plagued 13 million taxpayers in January, when the Internal Revenue Service initially sent their $600 checks to pass-through bank accounts that tax-prep companies set up to receive the customers previous tax refunds.
The IRS says it worked with the tax industry to fix the glitch and ran tests to make sure the latest checks would land in the right place.
While some money can be sent to closed accounts in any payment process, the IRS believes the volume of payments going to closed accounts will be significantly less than any previous round of Economic Impact Payments, the agency said in a statement.
But many TurboTax customers told CNBC that their money was once again dropped in old pass-through accounts, while others said their checks went to accounts they used to use but had closed.
Several customers aired similar complaints on Twitter, saying their checks had been directed to incorrect accounts even though theyd tried to update their banking information.
Also Check: Direct Express Stimulus Check Deposit Date
If I Want To Claim The Recovery Rebate Credit What Information Will I Need
If you didnt receive the full stimulus payment and want to claim more in the form of a Recovery Rebate Credit on your 2020 taxes you will need the amount of stimulus payment you were issued in 2020. The IRS issued Notice 1444 and Notice 1444B that shows the amount you were issued before any offsets in 2020 so have that form in front of you when you sit down to do your taxes.
The IRS will send you Letter 6475, Your Third Economic Impact Payment: This letter will have the total amount of your stimulus payment in 2021 . This letter has all the info you need to report the correct amount of the third stimulus you received and understand if you are eligible for additional stimulus dollars and how much.
You should take care to NOT include any information regarding the first and second stimulus payments received in 2020, or the 2020 Recovery Rebate Credit, when completing your 2021 return. The Letter 6475 will help you accurately record the total amount of the third payment received to calculate the 2021 Recovery Rebate Credit.
Why Did It Affect Stimulus Check Eligibility
Perhaps the bigger question is why this checked box would affect eligibility for the Economic Impact Payment . It’s true that a person is ineligible for an EIP if they can be claimed by some one else as a dependent. But the checked box at issue asks about the taxpayer’s spouse. Why a checked box in TurboTax indicating that a spouse can be claimed as a dependent by someone else would render the taxpayer ineligible for an EIP is unclear.
Intuit is working with the IRS to understand and resolve this issue: We are working closely with IRS to understand why and how this would have impacted a taxpayer’s eligibility to receive an economic impact payment . We expect more information will be available in the near future.
Intuit also noted that the TurboTax customers had the box at issue correctly checked for their 2018 tax returns:
All of these TurboTax customers correctly had this box checked for their 2018 filing. We do not know which filing/s IRS used to determine eligibility for this small number of filers or why this checkbox would be used for EIP eligibility.
Some TurboTax users, however, say that the box was checked in their 2018 filing, but not by them:
In 2018 my tax return had the spouse could be claimed by someone else as dependent checked. I certainly did not do this – we are both in our 70’s and no one else can claim either of us!!!!
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Will The Stimulus Affect My Taxes For This Year Or Next Year
None of the three stimulus checks are considered income, and therefore arent taxable. They wont reduce your refund or increase what you owe when you file your taxes this year, or next. They also wont affect your eligibility for any federal government assistance or benefits.
Remember, with TurboTax, we’ll ask you simple questions about your life and help you fill out all the right tax forms. With TurboTax you can be confident your taxes are done right, from simple to complex tax returns, no matter what your situation.
Who Would Be Eligible For The Third Stimulus Check
Families earning less than $150,000 a year and individuals earning less than $75,000 a year should get the full $1,400 per person. Families earning up to $160,000 per year and individuals earning up to $80,000 per year will receive prorated stimulus checks for less than $1,400 max.
Unlike the previous two rounds, you will receive stimulus payments for all your dependents, including adult dependents and college students.
You also dont need a permanent address, a bank account, or even a job to get these payments. Individuals may qualify for this money if they have a Social Security number and are not being supported by someone else who can claim them as a dependent.
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Do I Claim The Recovery Rebate Credit For The Additional Stimulus I Didnt Receive For My Dependents
Yes, if you did not receive the additional $500 per qualifying child in your first stimulus check or the additional $600 per qualifying child in your second stimulus check, you can claim the additional stimulus amounts in the form of a Recovery Rebate Credit on your 2020 tax return. If you did not receive the additional $1,400 per qualifying in your third stimulus check, you can claim the additional stimulus amounts in the form of a Recovery Rebate Credit on your 2021 tax return .
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Im A College Student Can I Claim The Recovery Rebate Credit
If you meet the eligibility requirements and you are not claimed as a dependent on your parents 2020 taxes or anyone elses then you can file a tax return and claim the Recovery Rebate Credit if you didnt receive a stimulus payment. Many college students worked in 2020 to help make ends meet, whether it was for an employer or a side gig. If you had federal taxes withheld from your pay you may be able to get some of your withholding back in the form of a tax refund, claim education tax benefits, and boost your refund with the Recovery Rebate Credit.
How Do I Get My Stimulus Check
Stimulus checks will be based on information from your most recent tax filings, either tax year 2019 or 2018. If you have not filed your 2019 taxes, the IRS will use information from your 2018 tax return. The IRS will use your adjusted gross income information in the most recent tax return filed to determine the amount of your stimulus payment and will deposit your stimulus payment based on the latest direct deposit information. If your tax return does not indicate a direct deposit account, you will receive a paper check.
If you are not required to file and you dont receive Social Security income or Supplemental Security Income you can provide the IRS with the information they require to issue a stimulus payment using TurboTax Stimulus Registration Product.
Also Check: Who Can Garnish Stimulus Check
Can I Get The Second Stimulus Through My 2020 Tax Return
The second stimulus payments will be advance payments of the recovery rebate credit just like the first stimulus payments under the CARES Act. If you are eligible and do not get a payment or it is less than expected, you may be able to claim it on your 2020 tax return as theRecovery Rebate Credit. The IRS is directing tax filers, who have not received their full payment by the time they file their 2020 tax return, to claim theRecovery Rebate Crediton their tax return. TurboTax will guide tax filers through the process of claiming the Recovery Rebate Credit so that eligible filers get every dollar they deserve.
Additionally, if you received too much stimulus based on your actual 2020 income you will not have to pay it back through a tax return in the upcoming filing season, just like the first stimulus payment.
Series: The Pandemic Economy
Fiscal Responses to COVID-19
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Congress has approved billions of dollars of checks for Americans hard hit by the biggest round of layoffs in U.S. history. But millions of Americans will have to wait months for that money and millions more may never get the money at all.
Thats because the rescue legislation left it to the IRS, an agency gutted by Congress, to organize the complex logistics of delivering the money to those entitled to it. As the IRS has struggled, for-profit tax preparation companies, notably Intuit, the maker of TurboTax, have stepped in with websites to help people get their checks.
But Intuit is not just acting as a conduit: It is also misleading unwary Americans by steering them to paid services that they could otherwise get for free.
The job Congress gave to the IRS in its $2 trillion CARES Act is seemingly straightforward: Identify the Americans who qualify and send them money. This turns out to be far more complicated than it sounds.
Tens of millions of Americans have not provided the IRS with their banking account information, if they have one. Some of these people have filed taxes, so they should eventually receive money but will have to wait weeks or even months for a check to come in the mail.
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