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My Stimulus Check Went to the Wrong Bank Account -- Now What?

By Matthew Frankel, CFP® – May 2, 2020 at 7:22AM

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Did you get a refund anticipation loan in 2019, or did you switch banks since filing your last tax return?

The CARES Act provided funding for most Americans to receive stimulus payments (formally known as Economic Impact Payments) of as much as $1,200 per adult and $500 for every qualifying child. And in mid-April, the IRS launched an online portal, known as Get My Payment, that allowed Americans to see when their stimulus check would be sent to their bank account.

In the vast majority of cases, there weren't any surprises. The IRS pulled bank information from each taxpayer's most recent return, and direct-deposited the stimulus payment to the same account the taxpayer's latest refund went.

But this system isn't perfect. Some Americans are logging in to the Get My Payment portal only to find that their stimulus check has already been sent -- to a bank account they don't recognize or no longer use.

If this situation happens to you, here's a quick guide to help you understand why this might have happened, and when you can expect to receive your money.

US Treasury check with money on top.

Image source: Getty Images.

I don't recognize the bank account my stimulus payment was sent to

Consider these scenarios:

  • You used a tax preparer to submit your most recent (2019 or 2018) tax return, and instead of waiting for the IRS to issue your tax refund, you obtained a refund anticipation loan or check.
  • When you filed your 2018 or 2019 tax return, you chose to have your refund loaded to a prepaid debit card instead of deposited to a traditional bank account. Once you received the refund and used the money, you never used the card again.
  • When you filed your 2018 and 2019 tax return, you had your refund directly deposited to your bank account. However, you've since closed that account and switched to another financial institution.

In any of these cases, the IRS wouldn't have your correct or current direct deposit information. The problem is that the IRS is automatically using the bank information from your 2019 tax return (or 2018 if you haven't yet filed your 2019 taxes) to send your stimulus check.

What happens next?

First, take a deep breath. If any of these situations applies to you, your stimulus payment isn't simply lost. It just complicates the process a little.

If the bank account that your stimulus payment is sent to is closed or no longer active, the financial institution is required to reject the deposit and return the money to the IRS. If your payment went to a closed or inactive account, you can confirm that the payment was returned on the Get My Payment portal as soon as the IRS processes the returned payment (which may take a few days).

After the IRS processes the return, a check will be mailed to you, and the Get My Payment portal will reflect this as well. The payment will be sent to the address on your most recent tax return, so if you've moved recently, it's important to make sure you've arranged for your mail to be forwarded -- if you haven't, the U.S. Postal Service allows you to do this online. According to the IRS, your payment will be sent to "the address on the 2019 or 2018 tax return, or the address on file with the U.S. Postal Service -- whichever is more current."

One important note: If this happened more than a week or so ago and you didn't see the "mailed payment" status updated in Get My Payment, it's a smart idea to check again. The tool was updated starting on April 21 to reflect the updated "mailed payment" status for taxpayers whose initial direct deposits were rejected. You'll also receive a letter in the mail within 15 days after your payment was made, which will also indicate how the payment was made and how to report if you still haven't received the payment at that point.

It's not a perfect system, but you'll get your money

The CARES Act provided about $300 billion for stimulus payments, and there's no way to disperse that much money to 150 million households in a short time without some issues. Essentially, the Treasury and IRS decided what would be the most efficient and accurate way to get money in the hands of the most households, and directly depositing the funds using the information the IRS already had was by far the quickest method.

And to be fair, the numbers reflect this -- more than 88 million stimulus payments had already been dispersed within a week of the first payments going out. If the IRS had instead attempted to manually collect and confirm the current information from everyone who is eligible, the process would have likely taken far longer.

Unfortunately, this also led to some Americans' payments being sent to bank accounts that are no longer in use. While it takes a bit longer to get your stimulus payment in the form of a check, don't worry -- the money is on the way, or will be shortly.

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