Millions of TurboTax and H&R Block customers say their stimulus checks were deposited in the wrong bank accounts this week, forcing many of them to wait longer for the badly needed aid after struggling financially during the COVID-19 pandemic.
But some have reported that the money has started to hit their bank accounts after the snafu.
Christopher Trent of Roanoke, Virginia, is one of those Americans. Trent, who used TurboTax to prepare his 2019 tax returns, was confused when he saw a “not available" status message when he checked his account on the IRS Get My Payment tool, which was created to help Americans track the status of their stimulus money.
When Trent contacted TurboTax earlier this week, he was told that if he paid his tax preparation fees with his refund, then his second stimulus payment may have been sent to a temporary bank account established by the tax preparer, which is no longer active.
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“It was a wave of emotions. I went from thinking $600 wasn’t enough to thinking ‘oh my God this is all that I have’ once I thought I wasn’t getting it,” says Trent, 26, who was furloughed in the spring and then laid off in July from his job as a transporter at a hospital.
But he was elated when he received his check Thursday via direct deposit.
“I needed the money right now," Trent added. "It was a blessing that I received it."
Over the past week, the IRS started sending out the second round of stimulus payments that are worth up to $600 for individuals and each of their child dependents. Millions of payments were set to be directly deposited in accounts the IRS had on file by Jan. 4.
But some TurboTax and H&R Block customers were surprised to see the last four digits of their bank account numbers were incorrect when they checked their payment status on the IRS website.
In an error, the agency sent some checks to TurboTax and H&R Block instead of their customers, the tax preparers said.
“Because of the speed at which the law required the IRS to issue the second round of Economic Impact Payments, some payments may have been sent to an account that may be closed or, is or no longer active, or unfamiliar,” the IRS said earlier this week.
It's unclear how many Americans are missing their stimulus checks, but about 13 million people may see a delay in getting their money after the IRS sent the funds to bank accounts that were closed or invalid, according to tax preparation company Jackson Hewitt.
When will you get your stimulus check?
Stimulus payments for millions of TurboTax customers affected by the IRS error will be deposited starting Friday, Ashley McMahon, a spokeswoman at TurboTax, told USA TODAY in an email.
Payments will be deposited into the same bank account that customers received their 2019 tax refund, though updates may not be immediately reflected on the Get My Payment tool, she said.
The company expects that most of the payments will be available Friday, though banks could take a few business days to process. Customers receiving a payment will get an email from TurboTax informing them of the deposit.
"We have been working tirelessly with the Treasury and IRS to get stimulus payments to our customers," McMahon added. "We know how important these funds are for so many Americans and we regret that an IRS error caused a delay."
H&R Block said it has processed all stimulus payments to its customers via direct deposit, check, or onto an Emerald Card, a prepaid card used for tax refunds by the tax preparer.
Customers who haven’t received their stimulus money can contact the company at 800-HRBLOCK or @HRBlockAnswers on Twitter. Customers with an Emerald Card should call 866-353-1266.
What happens if it's showing the wrong bank account number?
The information taxpayers see in the Get My Payment tool, including account numbers and potential deposit dates, may not display the correct account number since the IRS is working through updates, the agency said Friday.
“For those taxpayers who checked Get My Payment and received a response indicating a direct deposit was to be sent to an account they do not recognize, the IRS advises them to continue to monitor their bank accounts for deposits," the agency added.
H&R Block customers who had their tax refunds deposited into their bank accounts should have their stimulus checks deposited into those accounts, the company said. But customers who used the tax preparer’s “Refund Transfer” option for their 2019 tax returns may have had their money sent to a temporary account.
Refund transfer accounts are often created on behalf of taxpayers who want preparation fees taken out of refunds so they don’t have to pay preparers upfront. That could be why some customers are seeing the wrong account numbers, experts say.
“If you took a Refund Transfer, it may be reflecting that account number. Check your 2019 return to confirm,” H&R Block said in a statement. “But don’t worry – we have sent these payments on to the method you chose for Refund Transfer: direct deposit, check, or Emerald Card. The money should be there by the end of the day.”
Checks sent to closed accounts “affected less than 1% of second stimulus payments processed by H&R Block,” the company said in a statement this week.
What happens if you get a 'not available' message?
Other TurboTax users haven't been as lucky as Trent.
DeeAnna Kerns, who lives in Winston-Salem, North Carolina, has used TurboTax to file her taxes for the past five years and had no issues receiving her first stimulus check. But she was left scratching her head after she saw a “not available" message when checking her account on the IRS website.
“I keep getting an error message, which leads me to believe that my stimulus check was redirected to TurboTax's account,” said Kerns, 36, who works at a nonprofit that assists people with intellectual and developmental disabilities.
Anyone who sees this message won't receive a second Economic Impact Payment by mail or direct deposit and instead needs to "claim the Recovery Rebate Credit on your 2020 Tax Return," according to the IRS.
But others with that status like Trent still received the money this week.
TurboTax didn't immediately respond to questions as to why some customers had the "not available" status but still received the money.
What should you do?
Those who don’t receive a direct deposit should monitor their mail for either a paper check or a prepaid debit card, the agency said.
Payments must be sent by the government by Jan. 15, according to the IRS. Customers who qualify for the $600 but don't receive their payment via direct deposit or in the mail can still get it this tax season by claiming a special rebate credit when they file their 2020 taxes, the IRS said.
But some Americans aren’t keen on that method.
“For me, a credit would get eaten up in taxes and would be no benefit at all," says Kerns, who was hoping to stash the money away in her savings because she’s uncertain about her job security. "It would absolutely break my heart."
This article originally appeared on USA TODAY: Stimulus checks: TurboTax begins depositing payments after IRS error