Delayed Stimulus Checks & Known Issues for H&R Block and TurboTax Users
If you are still waiting on your second stimulus payment to be deposited, you can check the status of your deposit at Get My Payment | Internal Revenue Service (irs.gov). This site will give updated status information on your payment. We don't have any more information than the IRS website does, but will try to help clients as much as we can when there are issues. However, below is the information that we know now that may shed some light on any issues that arise.
Second Round of Payments On Its Way
The IRS has started sending out the second round of stimulus payment automatically, either via direct deposit or the debit card, as the agency did in the first round of payments. If you did not receive the first or second round of payments because you were not eligible based on your 2019 tax return, but would be eligible based on your 2020 return, these will be calculated and refunded via your 2020 tax return.
Issues With H&R Block and TurboTax Users
If you used H&R Block or TurboTax to prepare your tax returns in 2019, you may run into issues with receiving your payment as these entities have refunds deposited directly into a bank account associated with their corporation and then forward payments on to taxpayers. (They do this in order to deduct any rapid refunds and other fees that are due to them before forwarding on the final net refund to their clients.) These bank accounts would no longer be actively associated with taxpayers, so the stimulus payments are bouncing back to the IRS. Taxpayers in this situation will receive their stimulus payment, but may have to wait until filing their 2020 tax return, if the IRS doesn't have a better bank account on hand. There are already reports of this happening and it's a known issues by the IRS.
E-Filing Opening Date
H&R Block and TurboTax open up their filing dates earlier than the IRS because of their rapid refund options. This is often an enticement for individuals to file with them, in order to receive refunds more quickly. However, it is also resulting in glitches with receiving stimulus payments during the pandemic. For those that use a professional to file their taxes, or get their refund directly from the IRS, the agency will begin receiving e-filed tax returns on January 27, 2021. Any returns filed prior to that date can be submitted by tax professionals, but will wait in a holding pattern until the IRS systems are ready to accept and process them. Refunds are then generally issued 2-3 weeks after processing.
Answers to Questions
The IRS has stated that taxpayers should rely on the website for answers to issues with stimulus payments, as tax preparers and financial institutions won't have answers. They has also noted that phone representatives won't have information on issues beyond what is on the website, so it is asking taxpayers not to call with those questions, in order to avoid overwhelming an already short-handed system.
File Early and Be Patient
If you are having issues, your best course of action is to file early and be patient as some of these issues are worked out. Filing the 2020 return will allow the IRS computers to update their banking information and will release any payments that have not been issued on your behalf.
If you need assistance with tax preparation this year, please feel free to contact our office at (814) 299-5505, or you can make an appointment to speak with someone via our website at www.terrijohnsoncpa.com.