Millions of Americans are struggling financially because of COVID-19, and the longer the crisis drags on, the harder it will be to recover. Thankfully, there's a bit of relief on the table already thanks to the CARES (Coronavirus Aid, Relief, and Economic Security) Act, which has already boosted unemployment benefits, provided forgivable loans to small businesses, and made stimulus payments to millions of Americans.

If your income falls below a certain threshold, you're entitled to a $1,200 stimulus payment, plus another $500 per child under the age of 17 in your household. And because those payments are already being sent out via direct deposit, a large number of recipients can already use that money to avoid falling behind on their bills.

Money falling from sky


But what happens if your stimulus payment went out, albeit to a bank account that you've closed?

Thankfully, you won't lose out on your money in that scenario -- but you may need to wait a while to get it.

When your stimulus lands in a closed account

The fact that Americans are receiving stimulus cash via direct deposit is a good thing -- it means they get their money sooner. But the information being used to send out those payments is based on bank account details the IRS has on file for refund purposes from either 2018 or 2019 returns. Many people haven't yet filed the latter, since the IRS pushed back the deadline to submit 2019 returns to July 15 of this year. As such, if the IRS uses the bank account details from your 2018 return to issue your stimulus, you may run into a scenario where you've since closed that account.

Rest assured, however, that if your stimulus goes to an account that's no longer open, your bank will reject the transfer of funds. Once the IRS is notified that that payment didn't go through, it will issue you that money via a physical check instead. As such, you'll need to make sure the mailing address the IRS has on file for you is correct. The IRS will use the mailing address from your last tax return, so if you've moved since, make sure your mail is forwarded, or that you've updated your mailing address with the U.S. Postal Service.

Another thing: Once your payment is rejected by the bank that formerly housed your account, you should be able to use the IRS's Get My Payment tool to confirm that that money was returned and get a sense of when your stimulus will go out by check. Keep in mind that the IRS can only issue so many checks each week, so you may need to wait a bit to receive that money in the mail. But rest assured that you won't lose out on it just because it went to the wrong bank account initially. And if you're having a hard time paying bills without that cash, reach out to the providers you owe money to and ask for more time. Chances are, you'll be granted some amount of leeway.