Stimulus Check Snag: Closed Your Bank Account? You’re Waiting for a Paper Check.
February 12, 2019The recent stimulus payments have brought a wave of relief to many, but the process hasn’t been seamless for everyone. While the IRS encouraged direct deposit for faster delivery, a significant snag emerged for those who’ve closed bank accounts or moved since filing their 2018 or 2019 taxes. Let’s break down what’s happening, why it’s a problem, and what options – or lack thereof – are available.
Stimulus Check Snag: Closed Your Bank Account? You’re Waiting for a Paper Check
The IRS aimed to expedite stimulus payments by prioritizing direct deposits. To achieve this, they relied on banking information already on file from 2018 or 2019 tax returns. The “Get My Payment” app was introduced to allow individuals to track their payment status and, crucially, submit banking details if the IRS lacked them. However, a critical flaw quickly became apparent.
The Closed Account Conundrum
The biggest hurdle arises for those who closed a bank account used on a previous tax return. By the time the “Get My Payment” app launched, the IRS had already begun processing direct deposits. If you’ve closed the account the IRS has on record, you’re essentially stuck. The system will likely attempt to deposit the funds into the now-closed account, leading to a rejection and a delay.
The rejected payment then returns to the IRS, placing you in line for a paper check. This check will be mailed to your last known address as listed on your 2019 tax return. This creates a double whammy for those who have also moved since filing.
What the IRS Says (and Doesn’t Say)
The IRS’s guidance on updating information is stark: “We will send your payment using the information you provided with your 2019 tax return. *You will not be able to change it.*” For those who filed in 2018 and haven’t yet filed in 2019, the IRS has likely already processed the payment using the 2018 information. This highlights the importance of filing taxes promptly to ensure accurate payment delivery.
Who’s Affected and Who Isn’t
Fortunately, the vast majority of taxpayers won’t encounter this issue. Individuals who filed in 2018 or 2019 and still use the bank account they provided are likely to receive their stimulus payments without a hitch. Similarly, those receiving Social Security benefits directly deposited into an active account should also experience a smooth process.
However, a smaller segment of the population – those who’ve closed bank accounts and/or changed addresses since filing their most recent returns – are facing a significant hurdle. The “Get My Payment” app, intended to provide a solution, offers no recourse in these situations.
- Affected Individuals: Closed bank accounts, changed addresses since 2018/2019 tax filings.
- Unaffected Individuals: Still use the bank account listed on 2018/2019 tax returns, receive Social Security direct deposit.
Filing Your 2019 Taxes: A Potential Solution (If You Haven’t Already)
If you filed in 2018 but haven’t yet filed in 2019, there’s still a chance to update your information. Filing your 2019 taxes electronically as soon as possible is the *only* way to inform the IRS of any changes to your bank account or mailing address. This is crucial for ensuring you receive future stimulus payments and other important correspondence.
Conclusion: Patience and Prompt Action
The IRS’s stimulus payment rollout has exposed a significant challenge for a subset of taxpayers. If you’ve closed a bank account or moved since filing your 2018 or 2019 taxes, you’ll likely need to wait for a paper check, which can take time. The best course of action is to file your 2019 taxes electronically immediately if you haven’t already, and be prepared for a potential delay.
While the situation is frustrating, remember that the IRS is processing a massive volume of payments. Patience is key, and prompt action regarding your 2019 tax filing can help mitigate further delays. Stay informed and keep an eye out for that letter in the mail.
