Another darn stimulus question

[FEDUKE404]

Many of my clients have already e-filed and have/will have their federal balances due (they listen to their accountant!) debited from their bank account prior to April 15.

It has been stated that for those folks who receive a refund and who choose direct deposit, that the stimulus payments will automatically be made into the same bank account as was shown on the 2007 federal tax return. Using the old carrot and stick motif, paper checks will be issued later if direct deposit information was not provided with the original tax return.

My guess is those folks who chose a debit at the time of e-filing will NOT receive direct deposit of the stimulus payment, but rather a (later) paper check.

Does anyone know for sure? (....because I know the phones will be ringing....)

Thanks!

FE

[Jesse]

My guess is those folks who chose a debit at the time of e-filing will NOT receive direct deposit of the stimulus payment, but rather a (later) paper check.

I'm sure someone else will jump in if I'm incorrect. I believe as long as you have the bank info on the return be it for deposit or payment you will receive the rebate into that account, not a paper check.

[Koss]

Short Answer: No

The IRS website has the following information:

Q. I chose direct debit to pay my tax bill. Will my stimulus payment be direct deposited to the same account?

A. No, the account information used for an incoming Direct Debit payment to the IRS cannot be used as the account information for the Direct Deposit of the stimulus payment. People who choose Direct Debit to pay a balance due will receive their stimulus payments by paper check through the mail. [Updated 3/3/08]

Q. I plan to choose direct debit to pay my tax bill. I know my economic stimulus payment will not automatically be direct deposited based upon the Direct Debit information I've provided to pay my tax bill, but can I also enter Direct Deposit information to receive my stimulus payment by Direct Deposit?

A. Some tax preparation software will allow this, some will not. You will have to make this determination based on your own review of the tax preparation software you use. If the tax software allows you to enter both Direct Debit (Electronic Funds Withdrawal), as well as Direct Deposit information, doing so will allow your economic stimulus payment to be Direct Deposited. [New 3/20/08]

Q. I used direct deposit to split my refund betweeen several accounts when I filed my tax return. What will happen to my stimulus payment? Will it go to just one of the accounts?

A. If you elected to split your refund between several accounts, you will not receive your stimulus payment by direct deposit. Instead, you will receive a paper check.

Here's the link:

http://www.irs.gov/newsroom/article/0,,id=179181,00.html

There's even a brief discussion about what to do if the taxpayer already filed and elected to have the refund sent by direct deposit to an IRA account.

Talk about FUBAR. The stimulus payment could result in an excess contribution...

[Jesse]

Thanks Burton.

[FEDUKE404]

We have an answer!

Thanks folks.....guess I need to visit the IRS site a bit more often (reference the 03/20 update!).

(Only the guvment could come up with a plan like this.........)

FE