$600 Stimulus Check, Changing Direct Deposit Information

[ATSMAN]

I got three phone calls today from clients asking how they can immediately change the direct deposit bank information since the first $1200 check because they have switched bank accounts.

The Get My payment site was down so I am assuming there will be a similar system to verify direct deposit information like last time?

How are you guys handling this type of question?

[TaxGuyBill]

How are you guys handling this type of question?

Say, "The IRS has not given us direction yet. Wait.".



But this whole last-minute stimulus seems like it will be chaos. It's a 2020 tax credit. So when an earlier filer comes to you and you are preparing the tax return, you will need to enter in the software if the taxpayer received this advance credit or not. I doubt if tax software will have a spot to say "haven't received it yet, but it may still be coming".

But I assume the IRS will be giving some guidance in that matter. It just seems like trouble, especially for those people who use software that allows you to submit the e-file in early January (then the software company holds it until e-file opens in late January).

[Rapid Robert]

But this whole last-minute stimulus seems like it will be chaos

So many unanswered questions. But at least we know that "stimulus" is a misnomer.

Will they wait until the possible additional $1,400 amount is either passed or defeated before starting to send payments out? Will there be separate return reconciliation for the CARES Act EIP versus the newer payment(s)? Will they hold up returns claiming the credit if they think a payment was already made? Will they send out paper checks to those with no refund bank account on file? Will they reload existing debit cards, or send new ones, or neither? Will they send out another Notice 1444, further overloading the deliberately-crippled USPS? What about people who have died since the 2019 return was filed? Is there any reason to re-open the non-filers portal (since everyone who was eligible earlier this year already had their chance)?

To manage all this, at least we have a Hollywood movie mogul (for 3 more weeks) and a Beverly Hills tax attorney to ensure the best possible result for the neediest, lowest-income Americans.

[Rapid Robert]

Wow, it's like the IRS read my mind! Just saw in my inbox the following IR-2020-280. It answers many, but not all of the questions.

https://www.irs.gov/newsroom/treasury-and-irs-begin-delivering-second-round-of-economic-impact-payments-to-millions-of-americans

[Lion]

Issue Number: IR-2020-280

Inside This Issue

Treasury and IRS begin delivering second round of Economic Impact Payments to millions of Americans
WASHINGTON – Today, the Internal Revenue Service and the Treasury Department will begin delivering a second round of Economic Impact Payments as part of the Coronavirus Response and Relief Supplemental Appropriations Act of 2021 to millions of Americans who received the first round of payments earlier this year.

The initial direct deposit payments may begin arriving as early as tonight for some and will continue into next week. Paper checks will begin to be mailed tomorrow, Wednesday, Dec. 30.

The IRS emphasizes that there is no action required by eligible individuals to receive this second payment. Some Americans may see the direct deposit payments as pending or as provisional payments in their accounts before the official payment date of Jan. 4, 2021. The IRS reminds taxpayers that the payments are automatic, and they should not contact their financial institutions or the IRS with payment timing questions.

As with the first round of payments under the CARES Act, most recipients will receive these payments by direct deposit. For Social Security and other beneficiaries who received the first round of payments via Direct Express, they will receive this second payment the same way.

Anyone who received the first round of payments earlier this year but doesn’t receive a payment via direct deposit will generally receive a check or, in some instances, a debit card. For those in this category, the payments will conclude in January. If additional legislation is enacted to provide for an additional amount, the Economic Impact Payments that have been issued will be topped up as quickly as possible.

Eligible individuals who did not receive an Economic Impact Payment this year – either the first or the second payment – will be able to claim it when they file their 2020 taxes in 2021. The IRS urges taxpayers who didn’t receive a payment this year to review the eligibility criteria when they file their 2020 taxes; many people, including recent college graduates, may be eligible to claim it. People will see the Economic Impact Payments (EIP) referred to as the Recovery Rebate Credit (RRC) on Form 1040 or Form 1040-SR since the EIPs are an advance payment of the RRC.

“Throughout this challenging year, the IRS has worked around the clock to provide Economic Impact Payments and critical taxpayer services to the American people,” said IRS Commissioner Chuck Rettig. “We are working swiftly to distribute this second round of payments as quickly as possible. This work continues throughout the holidays and into the new year as we prepare for the upcoming filing season. We urge everyone to visit IRS.gov in the coming days for the latest information on these payments and for important information and assistance with filing their 2021 taxes.”

Authorized by the newly enacted COVID-relief legislation, the second round of payments, or “EIP 2,” is generally $600 for singles and $1,200 for married couples filing a joint return. In addition, those with qualifying children will also receive $600 for each qualifying child. Dependents who are 17 and older are not eligible for the child payment.

Payments are automatic for eligible taxpayers

Payments are automatic for eligible taxpayers who filed a 2019 tax return, those who receive Social Security retirement, survivor or disability benefits (SSDI), Railroad Retirement benefits as well as Supplemental Security Income (SSI) and Veterans Affairs beneficiaries who didn’t file a tax return. Payments are also automatic for anyone who successfully registered for the first payment online at IRS.gov using the agency’s Non-Filers tool by Nov. 21, 2020 or who submitted a simplified tax return that has been processed by the IRS.

Who is eligible for the second Economic Impact Payment?

Generally, U.S. citizens and resident aliens who are not eligible to be claimed as a dependent on someone else’s income tax return are eligible for this second payment. Eligible individuals will automatically receive an Economic Impact Payment of up to $600 for individuals or $1,200 for married couples and up to $600 for each qualifying child. Generally, if you have adjusted gross income for 2019 up to $75,000 for individuals and up to $150,000 for married couples filing joint returns and surviving spouses, you will receive the full amount of the second payment. For filers with income above those amounts, the payment amount is reduced.
How do I find out if the IRS is sending me a payment?

People can check the status of both their first and second payments by using the Get My Payment tool, available in English and Spanish only on IRS.gov. The tool is being updated with new information, and the IRS anticipates the tool will be available again in a few days for taxpayers.
How will the IRS know where to send my payment? What if I changed bank accounts?

The IRS will use the data already in our systems to send the new payments. Taxpayers with direct deposit information on file will receive the payment that way. For those without current direct deposit information on file, they will receive the payment as a check or debit card in the mail. For those eligible but who don’t receive the payment for any reason, it can be claimed by filing a 2020 tax return in 2021. Remember, the Economic Impact Payments are an advance payment of what will be called the Recovery Rebate Credit on the 2020 Form 1040 or Form 1040-SR.
Will people receive a paper check or a debit card?

For those who don’t receive a direct deposit by early January, they should watch their mail for either a paper check or a debit card. To speed delivery of the payments to reach as many people as soon as possible, the Bureau of the Fiscal Service, part of the Treasury Department, will be sending a limited number of payments out by debit card. Please note that the form of payment for the second mailed EIP may be different than for the first mailed EIP. Some people who received a paper check last time might receive a debit card this time, and some people who received a debit card last time may receive a paper check.

IRS and Treasury urge eligible people who don’t receive a direct deposit to watch their mail carefully during this period for a check or an Economic Impact Payment card, which is sponsored by the Treasury Department’s Bureau of the Fiscal Service and is issued by Treasury’s financial agent, MetaBank®, N.A. The Economic Impact Payment Card will be sent in a white envelope that prominently displays the U.S. Department of the Treasury seal. It has the Visa name on the front of the Card and the issuing bank, MetaBank®, N.A. on the back of the card. Information included with the card will explain that this is your Economic Impact Payment. More information about these cards is available at EIPcard.com.

Are more people eligible now for a payment than before?

Under the earlier CARES Act, joint returns of couples where only one member of the couple had a Social Security number were generally ineligible for a payment – unless they were a member of the military. But this month’s new law changes and expands that provision, and more people are now eligible. In this situation, these families will now be eligible to receive payments for the taxpayers and qualifying children of the family who have work-eligible SSNs. People in this group who don’t receive an Economic Impact Payment can claim this when they file their 2020 taxes under the Recovery Rebate Credit.

Is any action needed by Social Security beneficiaries, railroad retirees and those receiving veterans’ benefits who are not typically required to file a tax return?

Most Social Security retirement and disability beneficiaries, railroad retirees and those receiving veterans’ benefits do not need take any action to receive a payment. Earlier this year, the IRS worked directly with the relevant federal agencies to obtain the information needed to send out the new payments the same way benefits for this group are normally paid. For eligible people in this group who didn’t receive a payment for any reason, they can file a 2020 tax return.

I didn’t file a tax return and didn’t register with the IRS.gov non-filers tool. Am I eligible for a payment?

Yes, if you meet the eligibility requirement. While you won’t receive an automatic payment now, you can still claim the equivalent Recovery Rebate Credit when you file your 2020 federal income tax return.
Will I receive anything for my tax records showing I received a second Economic Impact Payment?

Yes. People will receive an IRS notice, or letter, after they receive a payment telling them the amount of their payment. They should keep this for their tax records.
Where can I get more information?

For more information about Economic Impact Payments and the 2020 Recovery Rebate, key information will be posted on IRS.gov/eip. Later this week, you may check the status of your payment at IRS.gov/GetMyPayment. For other COVID-19-related tax relief, visit IRS.gov/Coronavirus.

[Rapid Robert]

See post #4 above if you want the web link.

[ATSMAN]

How will the IRS know where to send my payment? What if I changed bank accounts?

Read IR-2020-280 carefully but did not see any answer for changed bank accounts. Did I miss it?

[TaxGuyBill]

It doesn't directly say, but it says "Taxpayers with direct deposit information on file will receive the payment that way. For those without current direct deposit information on file, they will receive the payment as a check or debit card in the mail. For those eligible but who don’t receive the payment for any reason, it can be claimed by filing a 2020 tax return in 2021"

So if the IRS sends the payment by Direct Deposit and the account does not exist, then the taxpayer does not have current direct deposit information on file with the IRS and the IRS will try to send a check.

The law only gives the IRS until January 15th to send out these payments (if they don't do it by January 15th, it can only be claimed on the tax return). I'm guessing the IRS isn't going to bother to try to set up a new website for taxpayers to change their information. They are going to try Direct Deposit with what they have, try to mail checks to to a many as they can, and then give up on the rest. They only have two and a a half weeks to do it.

[Twin Turbo Z]

$1200 dollars just appeared in our account. Can afford a steak dinner tonight !!!

[ATSMAN]

$1200 dollars just appeared in our account. Can afford a steak dinner tonight !!!

Mr. Trump wants to give you $2,800 more if the Republicans just go along with him. I think that will buy a lot of Angus steaks!

[Rapid Robert]

The law only gives the IRS until January 15th to send out these payments (if they don't do it by January 15th, it can only be claimed on the tax return).

Good catch. In another forum, it's been reported that the payments are already showing up on IRS transcripts. albeit with future dates.

Looks like the legislation also addressed the issue of decedents, although I'm not sure how they are going to know about people who died from COVID in, say December.

[ATSMAN]

One of my clients got a $600 deposit yesterday. So far nothing showed up in my bank account!

[ATSMAN]

How do I find out if the IRS is sending me a payment?


People can check the status of both their first and second payments by using the Get My Payment tool, available in English and Spanish only on IRS.gov. The tool is being updated with new information, and the IRS anticipates the tool will be available again in a few days for taxpayers. (Just checked still offline).

How will the IRS know where to send my payment? What if I changed bank accounts?

The IRS will use the data already in our systems to send the new payments. Taxpayers with direct deposit information on file will receive the payment that way. For those without current direct deposit information on file, they will receive the payment as a check or debit card in the mail. For those eligible but who don’t receive the payment for any reason, it can be claimed by filing a 2020 tax return in 2021. Remember, the Economic Impact Payments are an advance payment of what will be called the Recovery Rebate Credit on the 2020 Form 1040 or Form 1040-SR.


So I guess if taxpayer's account info has changed and bank kicks it out, the only option is to use the RRC at tax filing. So folks who normally don't have to file will be forced to file?? Am I reading this correctly?

[Uncle Sam]

Since IRS works through Social Security records to send checks to eligible senior citizens, will they also use the Social Security Administration's records to determine if the person is deceased?
From what I understand - religious organizations and funeral homes, upon knowledge of a person's death - automatically notify the Social Security Administration of a person's death. What I don't wish to see happen what happened in round 1 where deceased people received checks that had to be returned by deceased's representative.

[New York Enrolled Agent]

Since IRS works through Social Security records to send checks to eligible senior citizens, will they also use the Social Security Administration's records to determine if the person is deceased?
From what I understand - religious organizations and funeral homes, upon knowledge of a person's death - automatically notify the Social Security Administration of a person's death. What I don't wish to see happen what happened in round 1 where deceased people received checks that had to be returned by deceased's representative.

Uncle - your fears for the deceased will be reduced - check out the new IRC section 6428A(f)(2)(A)