The COVID-19 pandemic has caused massive economic fallout. To help struggling Americans, the Coronavirus Aid, Relief, and Economic Security Act (CARES Act) provided for most people to receive a stimulus payment of up to $1,200 per adult and $500 for each qualifying dependent child. 

For most people, the money you're due will be direct-deposited into the bank account the IRS has on file from your most recent tax return, which could be either your 2018 or 2019 return, depending on whether you've filed your taxes already for 2019 (the deadline was moved back to July 15).

But what if the most recent return you submitted has outdated bank information for you?

1040 form with pen and calculator.

Image source: Getty Images.

What happens if your bank account info is out of date?

If your most recent tax return provided the IRS with bank account info so your refund could be direct deposited, the IRS has no way of knowing you don't use that account anymore. The agency will still deposit the money there. 

If the account is no longer open, your bank should have rejected the funds' transfer. The IRS will be notified the payment didn't go through and it will switch to sending you a paper check instead of trying to deposit your funds. 

The paper check will go to the most recent address the IRS has on file, which could be a problem if it's an old address. Unfortunately, it could also take a really long time for your money to come even if your address is correct. The IRS has indicated paper checks will start going out the week of April 20, but only at a rate of about 5 million per week and staggered based on adjusted gross income ranges (with priority going to those with lower adjusted gross incomes). With the number of checks the IRS has to send out, the agency doesn't expect to be finished until August. 

If the old bank account is still open, the money will be deposited into it. You will need to figure out how to try to access the money from the bank. Contacting the bank directly is your best course of action. However, you could have a problem if you had unpaid overdraft fees or if debt collectors had a levy on the old account, as it's possible those you owe could seize the stimulus funds. 

Can you prevent the IRS from depositing your money to an old bank account?

If the IRS already has your bank information on file but it's outdated, you can update your information on the Economic Impact Payments website -- but only if the direct deposit info on file wasn't accurate and resulted in a refund check.

You cannot change your bank info if there is already a current valid direct deposit account. The IRS has limited this due to the risk of fraud. You can't update your physical address using the online tool, either, for the same reason. But you can file a 2019 return with your correct address or bank account if you haven't done so already. This can change where your money is sent if your payment isn't already processing and hasn't been delivered. 

If you don't have a valid bank account on file at all, you can also use the simple form on the Economic Impact Payments website to update your bank details. Again, you can do this only as long as your payment wasn't processed yet, so you should act quickly if you want to get your money ASAP. 

Act now to avoid unnecessary hassles

The coronavirus stimulus funds are an important source of financial aid for many right now. You should update your bank info now if you can, or start working on getting into your old bank account if you realize the IRS has outdated info. The sooner you act, the quicker you can get access to the money the government is sending to help you through the coronavirus crisis.