Stimulus Payment Quirk

[Lee DeRaud]

Ran into something very non-obvious about how the stimulus payments are handled:

If you got a tax refund using direct-deposit in 2018 or 2019, you don't need to do anything, your $1200 will direct-deposit to the same account.

But if you paid using direct-withdrawal in those years, the IRS can't/won't direct-deposit to that account automatically. You need to go online and give them routing/account numbers again. Yes, they're the same routing/account numbers for deposit and withdrawal and no, I have no idea why they can't put money into an account they just took money out of two months ago.

(FYI, the identifying information used to get that far has to match your 1040 exactly. E.g. spelling out "Drive" instead of "Dr." will throw an error. And three errors will lock you out for 24 hours. DAMHIKT)

[Lee Schierer]

It may be a legal technicality. When you give them your account number to withdrawn a payment you didn't give them permission to deposit in your account. Likewise if you gave them your account information to deposit your refund they do have permission to make deposits into your account. I know that we had our refund direct deposited and the "stimulus money" arrived last week.

[Kev Williams]

I send paper checks. I send paper returns. I want a paper check (still waiting) that I can stamp and the bank takes a picture of. None of this "E" stuff with the eye are ess for me, thanks.

[Doug Garson]

It may be a legal technicality. When you give them your account number to withdrawn a payment you didn't give them permission to deposit in your account. Likewise if you gave them your account information to deposit your refund they do have permission to make deposits into your account. I know that we had our refund direct deposited and the "stimulus money" arrived last week.
Why would they need permission to deposit money into your account after you've given permission to withdraw from the account? Can't think of a reason.

[Darcy Warner]

I'm not getting anything, nor do I want it. Wouldn't even cover utilities and food for a couple weeks. Just a carrot to dangle.

[Ron Citerone]

It may be a legal technicality. When you give them your account number to withdrawn a payment you didn't give them permission to deposit in your account. Likewise if you gave them your account information to deposit your refund they do have permission to make deposits into your account. I know that we had our refund direct deposited and the "stimulus money" arrived last week.


You are correct. We had that exact situation. People who are in desperate straits need to realize this technicality. My heart goes out to the people who lost jobs and health care.

[David Dockstader]

I think the biggest reason is that you may not own the account which paid your taxes. Maybe your parents or your in-laws paid your taxes for you, for whatever reason. So to make sure the YOU get the money, they want the numbers for YOUR account.

[Jim Koepke]

Why would they need permission to deposit money into your account after you've given permission to withdraw from the account? Can't think of a reason.

It is likely all in the legalese of working with a government agency. The 'taxes due payment' to the IRS from an account is a one time transaction. The transaction is payment for taxes associated with an SS number. Once payment is verified, the banking information may no longer be in the system.

Short answer, the system isn't set up that way. It wasn't planned in the original design of the system to have a wide spread payout to every taxpayer.

My opinion of what is strange about this is everyone in the specified income group who paid taxes will get a check whether they lost their job or not. If people are on a pension or Social Security, they will get a check.

In my case, it is nice to have the extra money. My plan is to help out our kids who did end up out of work for a short period of time.

jtk

[Stephen Tashiro]

If you got a tax refund using direct-deposit in 2018 or 2019, you don't need to do anything, your $1200 will direct-deposit to the same account.

Suppose your social security is direct deposited. Do the details of tax returns matter?

[Rick Potter]

Nothing new. Ten years ago, when handling my parents affairs I tried to deposit money in their account and was denied. I had to have them put me on the account.

[Lee Schierer]

Another fact is that some tax prep companies often have your refund sent to their account and then they take their cut and you get the remaining amount deposited into your account or as a check. This is particularly true of tax helpers who give you immediate tax payments.

[Brian Elfert]

There also is an issue where a lot of people, like me, are getting an "eligibility cannot be determined" error when using the online tool to try to put in banking information. The common denominator with those who are getting the error seems to be that they filed a tax return in 2018, but had not yet filed a return in 2019. I had not filed for 2019 yet out simply due to the deadline being extended and owing money. I electronically filed last Wednesday so I am hoping my status for the stimulus payment will change soon. The good news is my AGI went down about $1,000 for 2019 so that will qualify me for a higher payment.

I never get a refund and pay electronically so I assumed like a lot of people that they would use my bank account info to do the direct deposit, but not the case.

[Randy Rizzo]

Why would they need permission to deposit money into your account after you've given permission to withdraw from the account? Can't think of a reason.

It’s the government! Many years ago I needed additional pages added to my passport, ran out of room for additional visas. Since we were in DC for a couple days we hired an outfit that does all the legwork. Gave them our passports, get a call later. State won’t add pages until they have in hand a letter from the passport holder stating it’s ok to add blank pages!

[Jim Koepke]

Suppose your social security is direct deposited. Do the details of tax returns matter?

Probably, the Social Security Administration and the Internal Revenue Service are two different agencies of the government performing two different functions.

jtk

[John Makar]

I made a living for a decade running an IT team for a state revenue operation. When they made the decision to do all this they did not consult with any IT manager on capability, and probably nothing was in place to do it. They also didn't ask for an estimate of when it could be done. Trust me, I know the mind of politicians, they don't think like you or me, or most things human. Somewhere in the IRS and SSA a lot of COBOL is being written, some of it might even get tested before it's rolled into production. For decades we have demanded that government run at maximum cost efficiency. That comes at a cost of deminished adaptability. It will all get done, just not yesterday. That said, of Federal organizations that I have respect for, both the IRS and SSA are lean and mean, just not places necessarily pleasant to work.

Some of the things I really love about woodworking are I can acquire any of the resources I think are necessary, I can plan and design, I can step back and reconsider, and if it isn't right I can do it over, as many times as I like. Especially, I can build things to build things, and actually have something the military calls Logistics. Trust me, in 10 years of state management I never had any of those luxuries.

[Lee DeRaud]

Suppose your social security is direct deposited. Do the details of tax returns matter?Depends. For SS recipients whose income is low enough that they didn't file 1040s in 2018/2019, it goes there automatically. But it appears that the 1040 info takes precedence, possibly because the IRS is handling this, not the SSA.

I'm working off a very small sample here, but I have yet to encounter a person in my situation (direct-withdrawal IRS payment in 2018 and 2019) who has gotten their payment as of this date. (And yes, I have SS direct-deposit as well.)

As of this morning the site is now showing my payment as "yes, you're getting one, we'll update this page when we have a projected payment date". Sounds like they've outsourced the payment process to Amazon. :)

[Lee DeRaud]

Another fact is that some tax prep companies often have your refund sent to their account and then they take their cut and you get the remaining amount deposited into your account or as a check. This is particularly true of tax helpers who give you immediate tax payments.I have often thought that, if I ever really needed an additional income stream, I had two sure-fire ways to do it, both involving people whose coping skills are, shall we say, sub-optimal:
1. assemble IKEA furniture
2. type tax info into TurboTax
No way I'd ever run out of customers in either category.

[Doug Garson]

I think the biggest reason is that you may not own the account which paid your taxes. Maybe your parents or your in-laws paid your taxes for you, for whatever reason. So to make sure the YOU get the money, they want the numbers for YOUR account.
OK, never thought of that circumstance, valid point.

[Jim Becker]

Probably, the Social Security Administration and the Internal Revenue Service are two different agencies of the government performing two different functions.

jtk
If you receive SS in any form, the direct deposit should be automatic if you qualify for the CARES benefit since SS is deposited that way these days.

[Jim Koepke]

If you receive SS in any form, the direct deposit should be automatic if you qualify for the CARES benefit since SS is deposited that way these days.

My understanding is the CARES benefit is being distributed through the Federal Treasury of which the IRS is a part.

If you have seen this explained otherwise, please post the information or a link.

jtk

[Jim Becker]

My understanding is the CARES benefit is being distributed through the Federal Treasury of which the IRS is a part.

If you have seen this explained otherwise, please post the information or a link.

jtk

I'm only reiterating what has been published relative to the deposits...it was stated the folks on Social Security would see the payment in the same account that their SS is normally deposited into if they qualify for the benefit. I do get SS, but I don't qualify for the CARES benefit, so I can't confirm that. I can confirm that my 90yo mother's was deposited promptly last week as was my daughter's. Both are on SS. The deposit does come from IRS/Treasury.

[Jim Koepke]

Did they file taxes for 2018 or 2019?

Candy collects SS, mine hasn't started. My pension from California may keep me from ever receiving SS payments even though it was paid into before my public sector employment.

We received our stimulus payment right after it passed.

jtk

[ChrisA Edwards]

I've been getting SS deposited for about 11 months now. I also did our joint 2019 return and paid the IRS directly out of our bank account, same account as where I receive my SS.

I've received two small IRS refunds, by check, for adjustments to our 2019 Tax return that the IRS obviously felt was due to us.

Still no sign of a stimulus payment, to my wife or I, and no paper check.

My friends have received their stimulus payment, even my friend's Dad got his and he's been deceased for 6 months.

My grown kids also got the stimulus payments direct deposited.

Don't really need the money, but we fall into the category for eligibility.

[Jeff Body]

Another fact is that some tax prep companies often have your refund sent to their account and then they take their cut and you get the remaining amount deposited into your account or as a check. This is particularly true of tax helpers who give you immediate tax payments.

I have a co-worker in this situation. Her stimulus check went to the company that prepares her taxes. Supposedly the company sent it back to the IRS and told the IRS they need to figure out how to get it to the people. They weren't going to foot the payroll and mailing material cost to distribute it.

[Wade Lippman]

I'm not getting anything, nor do I want it. Wouldn't even cover utilities and food for a couple weeks. Just a carrot to dangle.

My son would have a gotten a full check, despite the fact that he is employed and getting his normal pay check, based on his 2018 return. I urged him to file as quickly as possible, and his 2019 doesn't get a check. You are right, it is not a great deal of money, but I feel terrible about it. I console myself a bit that he sold stock to pay his taxes, and saved as much as a check by getting $10,000 out of the market. Still, if I were psychic, he could have gotten both.
The pause gives me an opportunity to dwell on these absurd things.