Taxpayers report IRS stimulus payments being sent to wrong bank accounts

A second round of stimulus payments triggered a second round of complaints from many angry taxpayers who aren't seeing their money quickly.

So while many people began receiving the second stimulus payments in their bank accounts Monday, others only saw red. 

Some $600 payments apparently are going into the wrong bank accounts, according to frustrated taxpayers. Or checks are being mailed, others say, even though their first stimulus payments arrived promptly back in April without any trouble via direct deposit. 

Some taxpayers are "floored" to discover that they might have to wait for a check or debit card in the mail or even wait to file their 2020 federal income returns before the second stimulus mess is resolved. 

Many are angry that the Internal Revenue Service and the U.S. Department of Treasury aren't being up front about the possible snags. 

"You've got more glitches going on than you're leading people to believe, which is what I suspect," said Deb Cataline, 65, who grew up in Flint but now lives in Knoxville, Tennessee.

Cataline, who once worked as a paralegal for the UAW-General Motors Legal Services Plan in Flint, said she has had the same address in Knoxville for the past 10 years. She hasn't changed her bank account. And the retiree has been receiving Social Security benefits via direct deposit for more than a year. 

Her son received his second stimulus payment through direct deposit by Jan. 4, as soon as the second stimulus payments became available, and he casually asked her whether she received her money. 

She hasn't received a dime yet. And she was shocked Monday when she used the IRS tool called "Get My Payment" at IRS.gov to track her Economic Impact Payment once that tool was updated. 

The site told her: "We scheduled your payment to be mailed on Jan. 6, 2021, to the address we have on file for you. We will mail you a letter with additional information on this payment."

"My first stimulus was direct deposited," Cataline told me by phone Tuesday. "Why are they mailing a check?"

Cataline said she's OK waiting but heading to the bank to eventually deposit a check is troublesome given that she's trying to stay home during the pandemic to avoid getting sick.

Worse yet, she said, she fears for people who truly need this money as soon as possible. 

Some may need the money to pay the rent or the gas bill. Some are living on significantly reduced paychecks after their hours have been cut at work during the pandemic.

What should we expect? 

The second round of stimulus payments started going out the last week of December and will continue through early January, according to Luis Garcia, an IRS spokesperson.

The stimulus money is being spread across the economy to consumers in three different ways: Direct deposit into bank accounts, the mailing of paper checks and via new and existing government-related debit cards. Hint: Don't throw out a new blue Visa debit card if one suddenly pops up in the mail because that card issued by MetaBank could have your stimulus payment on it. 

Garcia said direct deposit payments will be made first to individuals who have valid routing and account information on file. This includes both filers and those that used the non-filer tool at IRS.gov to receive their first stimulus payment.

If the IRS doesn’t have routing and account information for a direct deposit, taxpayers will be sent either a check or debit card in the form of a new EIP Card. Paper checks and debit cards require more processing and mailing time.

The IRS plans to relaunch the Get My Payment online tool soon to include information on the second stimulus, according to Garcia.

The second round of Economic Impact Payments — or what the IRS has called "EIP 2" — is generally $600 for singles and $1,200 for married couples filing a joint return. If you have young children, you could receive more money. 

An extra $600 is available for each child who qualifies. But just like the first round of stimulus payments, an age limit is in place and parents aren't getting the extra $600 now for dependents who are 17 and older. 

Where are the trouble spots? 

We saw a great deal of frustration and confusion back in the spring and summer, as the federal government rolled out the first stimulus payments. Some people had to wait months on end. And we're seeing some similar fears. 

At the same time, several consumers said Tuesday that they personally did not have any trouble receiving the first stimulus payments in 2019 but they're now facing some type of blip with the second payments now. 

Just because things ran smoothly for you the first time apparently doesn't mean you're going to easily get the second stimulus. 

Several readers emailed me Tuesday morning to tell me about a variety of problems that they're facing now. 

One huge issue: Many said the IRS site indicated that their Economic Impact Payment was deposited Monday into a bank account that isn't theirs.

One reader said: "For me, my first check went to my bank account and the second shows an account I do not know." 

Another said the stimulus "appeared" in his bank account but disappeared somehow and his bank had no answers. 

Some H&R Block customers in particular are upset about payments not ending up in their own bank accounts.

Some who are complaining used H&R Block for tax preparation services and had the fees withheld from their refund money. In the past, that process led to a glitch and some consumers had to wait to receive a stimulus check. 

H&R Block took to Twitter to state: "The IRS Get My Payment website may display an account number you don't recognize. If you took a Refund Transfer, it may be reflecting that account number. Check your 2019 return to confirm."

H&R Block issued a statement to the Free Press on Tuesday: "H&R Block understands stimulus checks are vitally important for millions of Americans. The IRS determines where second stimulus payments were sent, and in some cases, money was sent to a different account than the first stimulus payment last spring.

"We immediately deposited millions of stimulus payments to customers’ bank accounts and onto our Emerald Prepaid Mastercard yesterday, and all direct deposits are being processed," according to the statement.

"If the IRS Get My Payment website displays an account number a customer doesn’t recognize, H&R Block customer service agents are ready to help with additional information at 800-HRBLOCK (800-472-5625) and @HRBlockAnswers on Twitter."

Other consumers say they're being told by the IRS site that they'll be mailed a check, even though the consumers said the government has their correct direct deposit information. 

More:Haven't received your second stimulus yet? IRS says don't call

More:The next U.S. stimulus could arrive soon. Here's what to consider before you spend it.

Some fear that the IRS site indicates that they won't get any payment even though the readers are certain that their income would allow them to qualify. 

It is true that some people will get a reduced payment or no payment now. 

Since the latest $600 stimulus payment is half of the maximum stimulus that we saw in the spring — which was then $1,200 for singles or up to $2,400 for married couples — the complete phaseout will hit more families this time around.

Eligibility for the payments starts to phase out at modified adjusted gross incomes of $75,000 for single filers and $150,000 for joint filers.

The stimulus payment is cut by $5 for every $100 of income earned above the thresholds. For example, a couple earning more than $174,000 won't get a second stimulus payment — that compares with the $198,000 cutoff with the spring payments. Single people making more than $87,000 wouldn't get stimulus money now. 

What can you do? 

Taxpayers will be able to square things up when tax filing season begins later in January. It's not terribly reassuring if you'd like the money now but the tax return will offer some relief. 

The 2020 federal income tax return will include a “Recovery Rebate Credit” that will apply to both the first and second round of stimulus payments.

The IRS notes: “If you have not received your full payment by the time you file your 2020 return, you may claim the Recovery Rebate Credit on your tax return.”

If you're worried now, the IRS suggests that taxpayers go to IRS.gov to track the stimulus payments. The IRS says taxpayers should not call their bank or the IRS. 

Given the level of frustration that some are experiencing now, though, it is best to try to take a breath and not bank on that stimulus arriving quickly. The stimulus sequel isn't looking much better than the original production. 

ContactSusan Tompor: stompor@freepress.com. Follow her on Twitter@tompor. To subscribe, please go to freep.com/specialoffer. Read more on business and sign up for our business newsletter.